Wednesday, August 10, 2011

HALLELUJAH


Just like movie magic our precious market turned on a dime (after the appropriate head fakes and stop shops) and soared into orbit. Once again Hollywood and whoredom have intersected on Wallstreet. For me the night was a little more mundane and was chartology. It is very apparent that another major reversal candle was painted on the miners keeping them in a VERY important uptrend channel. This turn occurred with volume in many of the indices eg. GDX...GDXJ..and indiviual miners that I looked at ANV SSRI SLW EXK etc. Fwiw AG looks cheap still....but...it can always get cheaper. The market itself might have formed a multi-week bottom here. They need time right now and some nice triangles may be forming to bring us to the next bump down in a few weeks. That would set up for a multi week run in the miners. Will it happen? Guess we'll find out. Just make sure you keep plenty of cash stashed if they do a quick retest of the futures touch of the 1074. That could make a nice quick trade in the next few days. The 1200 level should provide a short entry trade if you are inclined....1204 is the 38.2 fib retrace of this dump so let's see if it breaks and holds that. No reason to be making any heavy bets long here.....you have to stand back and see how the market digests this horrific technical damage that it just incurred. This is analagous to driving a spear through a lions heart then watching to see if it can live. It may stagger around and kill you before it falls over so watch out.

Social mood is deteriorating and people are breaking down. The riots across England are very disturbing and it can spill over into the Eurozone quickly....If it does then this entire market ponzi will collapse. gl to all

"This is the underlying reality that informed traders understand. The whole system is being propped up by the power to print, and that power alone. No matter how many miracles some people think that paper money can accomplish, there is an underlying realization that the whole system is a hoax." Lew Rockwell Jr.



56 comments:

  1. Double post of the whole blog :)

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  2. Morla comment....I'ma re-toot my own horn and repost my post from the very end of the last thread. I doubt Kli will mind.

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

    Good job 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). 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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  3. sorry morla..technical difficulties....heheheheheh

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  4. No worries, you can have ramen too if I have it to spare.. It's mostly salt though. Here's a weird tip, if you have faith in your teeth you can shash up some ramen, give it a hot breath to make the salty mix sticky-ish, shake it up in a bag and eat that dry. As men I think we can all agree that a nice solid crunch is a satisfying thing.

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  5. So, my taste in music has been known to be such as this:

    http://www.youtube.com/watch?v=_9Oq0sWYU3o

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  6. As for demonstrations don't over look whats going on in Israel they too are rebelling against the PTB. I wonder what will be the spark that brings it here?

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  7. dunno Tom......but I don't see it until next summer.....can you say..ELECTION YEAR

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  8. I dont know if it will take that long. My guess is it will start in one of the States with a large entitlement dependent population. It will only take a few cuts to light the fuse........

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  9. It'll start here with groups of people most of us will dismiss as "not us". Easy to sick the local and national police on them without much remorse. Newscaster on WCBS after watching a report on flash mobs said its kids acting as they shouldn't.

    Nice job Morla - Ratigan cracks me up. My mouth was stuck open on the parts like he wants the President to repatriate off shore money, give to a new bank to lend to businesses, tell everyone the banks are defrauding us...lol

    He ain't wrong but I don't see that happening.

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  10. I have been reading some articles on the "Keystone Speculator" site.

    The author there is concerned with an eventual beatdown in the price of gold. The author points out that gold has moved significantly above a 65 week trend line. Also the RSI & MACD are high. Charts are shown indicating negative divergence.
    Also, when the Feds raised margin requirements for silver on 4/27/2011, that lead to a 35% drop in the price of silver.
    The author is speculating that the Feds (Fed meeting today) could raise margin requirement for gold--possible announcement today or tomorrow.

    Let's see what happens.

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  11. Doc........could happen......only temporizing measure.......won't stop the big boyz.....its not speculative traders that will drive the price of gold....it may help to drive some of the speculative buyers over time into the miners..also a lot of the miners runup has been hampered by the paper black holes of GDX and GDXJ....scam scam scam

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  12. Kli,
    You mentioned the Social Mood deteriorating!

    http://www.rasmussenreports.com/public_content/politics/general_politics/august_2011/new_low_17_say_u_s_government_has_consent_of_the_governed

    Natives are getting restless......

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  13. Kli,
    I agree that raising gold margin requirements would only be temporizing in lowering the price of gold.
    Just posting possible Fed action.

    Do you think EUO will make eventual gains higher?? It is up one day, then down the next.

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  14. Hi Kli
    This my be a stupid question, but how does the long gold short the miners trade work?

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  15. All,

    Tom just asked an excellent question, bookmark this post since it will come handy later on. During initial phases of MARKET deflationary reaction, Physical Gold outperforms miners and actually miners can get hammered along with rest of stocks. The reason is that institutions and hedge funds in order to raise cash will sell their winners including miners due to margin calls,,etc until miner take down is complete. After that phase, the rest of market keeps going down BUT miners start a multi-yr rally during deflationary collapse to catch up with price of physical Gold. What's unknown now and no one can tell is the timing of the bottoming out for miners during this phase, my guess is the latest would be first quarter of 2012 for miners to bottom out and then start a multi-yr upside. For now physical will outperform gold/silver stocks due to overall bad stock market. During days that market is up you will see gold stocks go up but to be sold with rest of market once S&P down turn starts until bottom which depending on severity of down turn can take gold stocks 75% to 80% lower from the highs and then multi-yr bull market for Gold stocks will start while other sectors in the market keep taking a beating.

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  16. During days like today, the flow of money is in SKF since financials and banks are considered no no, I have not seen any of you even mention it, follow the money folks, look at what SKF is doing today, I am not talking about buy and hold, during the opening once the short term direction is known you can make good money scalping SKF. Rather than having a one track mind which is waiting and speculating what miners do or do not, focus on where the money is now and make some $$$$$$$$$$.

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  17. Jay and I were watching Monday, SKF was up 18% at 3:00PM, FAZ even more but I'm not nimble enough to play intra-day, nor understand the turn of the "tape". Plus on vacation and beer o'clock comes much earlier than usual...

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  18. Homer,

    Oh well, it is what it is, so be it!

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  19. Welcome to the Great Depression......its going to be a long road very busy here.....will join you later......please keep it going

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  20. lol - in the words of Dirty Harry, "a man's got to know his limitations".

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  21. You can get raped playing with SKF or SRS directly due to the whipsaw, decay and market premium. If you need to short financials do so directly with the stocks themselves. If you have to play with SKF short the options, both calls and puts to let the decay play in your favor.

    I agree with Joe, on waiting for gold stocks to finish tanking with the market and then pick up the survivors if you want to play the paper trade. Lots of companies will be be insolvent or reorganize as things get worse in all sectors including PM.

    Some plays are beginning to get more volatile independent of the market like LDK and ATPG for high beta players.

    Others like SGY and PAL are still tracking broader index movements.

    At this point if you are holding a paper position overnight, you will probably get hosed.

    I am going to enjoy more Homer Simpson time during the festivities myself. Talked with a few people who were nearing retirement planning to build their dream home and live the life of travel on hopes the market will go up again nonstop; didn't pour cold water on their dreams as one was my dentist holding a drill in my skull.

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  22. LDK making another move today.
    This was thought to be a possible short squeeze candidate, so perhaps that is what's happening.

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  23. I remember reading somewhere that if you spend $1000 on beer and turn in the bottles for scrap, you might loose less than the market with banking stocks.

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  24. Red,

    I completely agree that SKF is not buy and hold which I mentioned in my post. Majority of posters here are not experienced with shorting individual stocks which is another reason I mentioned scalping intra-day SKF and seems like most do not know how to do that either which means no problem, I'll take advantage of it any chance I get. Your suggestion on playing SKF based on the audience we have is more realistic. I sometimes forget majority here are not experienced traders especially when it comes to intra-day trading.

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  25. Joe,

    thank you for that explanation on physical gold/ miners. and i do agree with you on the ETF's, this is a perfect environment to trade them. huge intra day moves. i know they are risky, but its hard to ignore the movement. and movement is what generates profit. props to the people that picked up LDK, i missed this latest run unfortuneatly.

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  26. Ken It was a joke (I think), but here is prolly what you read on recycling beer containers:

    If you had purchased $1,000 of shares in Delta Airlines one year ago,
    you would have $49.00 today! If you purchased $1,000 of shares in AIG, you would have $33.00. If you purchased $1,000 of shares in Lehman Brothers, you would have $0.00 to...day.
    But, if you purchased $1,000 worth of beer, drank all the beer, turned in the aluminum cans for recycling, you would have $214.00.
    Therefore the best current investment plan is to drink heavily & recycle.
    It is called the 401-Keg Plan.

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  27. I suggest a cheap beer to better the return....

    treasury auctions are ruling the money flows right now...so much debt to float that primary dealers cant prop market...

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  28. 30year fixed at 4% 0 points....wow

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  29. today's message indicates that retest of low will be sooner than later......look for monday/tues trade....also the low is 1050-1075 for this wave of selling IMO...at least that is a long buy target for me.....it should give you a several week up bias....

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  30. I mentioned IPSU yesterday, today it tested 7.80 again and bounced, seems like for now 7.80 is the bottom, it has already had a huge drop from 24 area to 7.70.

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  31. I like to see IPSU drop to 5 but we might not get it, tape turned again today in the down market at 7.80.

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  32. ATPG has a very nice short covering from yesterday lows of 6.30.

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  33. I got IPSU at 8.05, with a few buy and sells got my cost basis lowered to about 7.50. holding for now.

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  34. Many thanks joe, bookmarked this page. I asked Kli about that while you were gone, someone (forgotten who) had an article on goldseek. saying price of miners generally lagged 9 mos. after physical rally...had charts from the '79-'80 situation. Best, N

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  35. Oh, and I don't have to tell you phys and pslv rockin'.

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  36. Also be aware ALL ...miners have been in a bearish move for SIX MONTHS...it may be that they have fulfilled the prerequisite move and that the stockings are full of shares for the boyz....you must consider that possibility.....this trade has been very difficult and with the move in the physical prices I think one must consider that possibility.....don't be anxious to liquidate

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  37. these are three days of very interesting moves in the miners.....especially considering the action of the overall market....always listen to the market

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  38. Ken,

    You probably already know this , but just in a case, if you are trading outside of 401K account, do not worry about wash sale rule if you buy and sell the same stock a lot within 30 days if you lose money in one of those trades as long as you do not hold the stock before yr ends. You can trade the same stock as many times as you want and at the end of the yr, the averafe for that stock determines win or loss. Some traders think if they lose on a trade, they have to wait over a month to buy it back again if they want to claim loss, that's only true if one decides to carry the stock to next yr, as long as you do not own the stock comes end of the yr then it all averages out.

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  39. Joe,
    Please don't say you want to see IPSU drop to 5. I finally got off the fence yesterday, and bought it at 8.26.

    I'm crossing my fingers and hoping for gas and beer money. I don't want to be eating Ramen & water the whole trip.
    Up .24% now from yesterdays close.

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  40. Dung,

    For you guys $8 is not a bad buy at all which is why I brought it up, if it drops lower then average down, this puppy has already taken a real beating. I was refering to myself liking it as a trader at $5 since if it gets there then the squeeze would be even sweeter. IPSU doing nicely today while the whole market is tanking, either way my point is do not sell IPSU if it goes lower.

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  41. I am trading in an LLC with market to market. :)

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  42. Joe,
    Thanks for the tip yesterday. I'm holding I was being a little humerous that doesn' always come off well in writing...

    I did feel a little shutter as I read the $5 remark.
    I am hoping this stock will pay for my camping trip I'll be holding it hopefully back to 24.

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  43. waiting for 24 has a lot of risk. Take profits along the way. I probably will not have any at 24, but if I did, it would be about 10% of the amount I have now.

    I sold my last VHC at $37.20. It was only 25 shares from my $15 entry, lol. Watching how the stock has crashed, I realize it could have dumped at any time. I feel fortunate about it now.

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  44. Inlet I believe that's how fraternity dues get paid.

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  45. All,

    When is the market going to hit resistance? Or is this it? Game over. Great Depression 2

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  46. Jay,

    Next support is at 1075 for S&P, followed by 1025 which was the low for last yr's flash crash, if those numbers do not hold then 850 is the next support. Do not forget one upside day does not determine whether the down side is over or not. As far as resistance which is the upside, 1200 is the key.

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  47. Jay,

    I am not interested in great depression II, my main interest is to take KLI to cleaners since he loves gold stocks, a nice beech slap will do the job, heheeeeeeeeeeeeeee!

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  48. kli is working over 80 hrs a week now, by the time I am done with him, he will be working 140 hrs a week to catch up, heheeeeeeeee!

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  49. Talk to you guys tomorrow, time to take care of business now.

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  50. FYI Joe, the kool-aid over here in the miner camp is delicious today :)

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  51. Joe ....working tonight.......will be in and out till AM

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  52. CONfidence...

    http://www.zerohedge.com/news/weekly-outflows-domestic-equity-mutual-funds-surge-13-billion-nearly-surpasses-post-flash-crash

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  53. CME raised margins on a host of things..

    Jessie has a post...

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  54. It was nice to get rewarded today on the miners. They have held-up remarkably well in this chop-shop, but still unsure of near-mid term prospects. Holding a core, but will take profits it there's a sustained run-up.

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