Thursday, June 30, 2011

PULL THE PLUG?


Or keep printing. NO choice for the helicopter man. Monetization of the entire world underway. Greek the Greeks and let's move on to the next leak. Those Ouzo lickers aren't up for game but they do play a tough game of badmitton with tear gas canisters. Keep focus on the game. Air had to come out of the commodities but the game has not changed. Kick the can down the road as long as it doesn't get so heavy it breaks your foot.

There is still no clear evidence the PMs or Miners have bottomed so don't throw into that trade quite yet. I'll hold my core and take a little off if it starts turning off the 50ma around 532 on the $HUI.....but to get bullish the $HUI has to clear 552 and HOLD. Then I may add on pullbacks...Right now its patience. No rush to play in the casino. Let the traders on the blog pull the flesh from the carcass in this meat grinder.

On the news front we are getting job loss now in the Wall Street firms as trading and QE begins to wane. The next few years will be brutal for the Wall Street firms but a lot of the last scraps from the taxpayer were picked to give them the last three years. I hope they enjoyed their last feed.

Soon the reality of the Kondratieff Winter will begin to penetrate into all sectors of our psyche and denial will become acceptance. The Pos will continue their Kabuki theater with fewer and fewer believers to entertain. As for as investing you make your own decisision. If you believe that Ben has to keep monetization going here then you know what's going to happen.

from Jim Willie

Wednesday, June 29, 2011

WHATS THE NEXT STEP?


If you are still in this market then you had better ask yourself why. This is where the game gets seriously confusing. No clear direction in the Market any longer with Ben's explicit message that QE2 is ending. Obviously many of the shorter term treasuries will catch a bid with fear creaping into the equation. Obviously there will be no attempt to increase rates in the the next year. When and if they do you can turn off the lights. That would be a signal depression is coming. Remember that.

I want to make some comments before I sign off today. Careful in the future on your cash holdings. I will be purposefully obtuse as Jim Sinclair was. Your trading accounts sitting in "cash" could be in jeopardy. It is one reason to consider being in equities OR products like PHYS or CEF or even PSLV. This is a true danger. What manner you choose in holding cash is yours, but these are strange times and expect confusing signals. I will repeat what little vision I have on the current trading environment. It will push the extremes of the Bollinger Bands and your patience. I have enjoyed the daily exchanges but am recieving mail from some of you expressing your fear of continued participation in this market and a public forum. I understand AND agree. gl all

Tuesday, June 28, 2011

ULTIMATE GREECE SOLUTION


As mentioned before a rock and a hard place for a population that has lived beyond its means for decades is never one that is palatable to the population. Particularly the population that must bear the brunt of the "austerity". If you think the populace that has enjoyed retirement at 55 and yearly 6 week vacations is going to go happily through the gates of auterity singing kumbaya and dringking ouzo, think again. Eventually the weak kneed politicians will be supplanted by the generals to control the population. Their heavily socialized economy was ushered into the Eurozone fraudulently by the GS derivative sham that was sold to them so they could "qualify" to meet the "numbers". They may cry now but they took it. Now they have to pay the "devil" and they don't like the "devil" that was in the details. NOW they want the past eight year binge for free. Hehehehhe.....sorry Greece. When you dance with the devil.....you pay.

We danced too. We danced even longer than Greece. Our spending didn't go to vacations for the people and retirement starting at 55 or swimming pools. Our spending over the last decades went to our proud military and its wars all over the world. It goies to the weapons programs that make us the most feared power on earth. It goes to the programs that help us entice men and women to serve our wars. Six-figure college scholarships. Military retirement by 40. Health care for life. Not too bad in this economy if live to collect and most do. Unfortunately for the gravely wounded the VA system leaves a lot to be desired. Someone has to pay for our military might since we have been borrowing trillions to support it. Don't forget our retirement doesn't start until 67. We don't have nationalized one payer health care. And of course we can't tax the rich like Ike did in the 50s by raising the marginal tax rate on all yearly income over 2million to 90% rate. Just keep kicking the can down the road and keep kicking grandma in the gut.

Keep it simple we are debtors. We are going to try and keep this going another year. It means we will have to print money, not just for us but for many of these ailing economies. Then we will pull the plug. Can it all come apart sooner? Absolutely. So just be aware we are playing with fire.

The miner's core is painful but the cash in reserve will be put to work if they drag this pig down to $HUI 426 area......Gold and silver eventually will be much higher. Just buy the physical if the market roller coaster is too much.

gl all.

Ugly 50/200 bearish cross.....on $HUI

Monday, June 27, 2011

RUN! RUN!


Like rats off a sinking ship the peeps are chased out of the commodity trade. Fear...the strongest motivator of all checks into the precious metals trade. All it takes is a pinch of fear from deflation...a pinch of Greek default....a pinch of contagion....a pinch of oil collapse......and ouila you have some fast margin calls and a scramble for liquidity. I don't like this at all. It scares me. Well at least it makes me kinda scared. It is the game you know.

The big boyz know this game isn't going to go on forever. At least its not going to go straight up forever. I warned you that the metals trade was way too hot when silver was pushing to 50 and needed to be reigned in. Of course there were predictions that JP Morgan was going to go broke with its silver short and the COMEX was going to default and that silver was going to go to the moon. Actually all of those could happen but you may be broke before they do. Certainly if you think that JPM (the Fed) is going broke then I guess you haven't checked lately with the ability of the Fed to print money until the cows come home. Who do you think is pumping Greece and the rest of the PIIGS right now through every back door channel?

The question that lingers is not if there is QE3.....but when and in what manner will it be implemented. There is NO CHOICE. This is what monetization is. Its not about pulling the plug on the ponzi in the middle of the game. So you have to be aware that at "some point", an 80lb rabbit is going to get pulled. Will it save the day? NO of course not. But its going to happen and its going to result in equities catching a bid. Precious metal will respond too. Gold has more security but Silver COULD linger a tad.

Miners may work their way down to the 426 area on the $HUI so use caution.

Watch the 140.80 on the Euro/usd......if it breaks then I think we will see 139 fast. The Euro is toast and eventually will start breaking like glass. But remember...once Ben monetizes, the dollar could slide back below its previous low. EUO is still in play. Also watch YCS .....its a nice short on the Yen....and they need to sell that currency soon to prop up their manufacturing. Japan is in bad shape. Stick a fork in them.....they're done unless the Yen takes a big hit.

Miners look like another dip but ANV just might do its own thing. It seems to move independently from the HUI.

Here is Clive Maund's take on silver...he see's it breaking 30 perhaps

Friday, June 24, 2011

COMING HOME?


Really? Does anyone really think these modern legionairies are coming home. Is there a choice now? 900 military bases now in 125 countries. Rome would be proud. Of course there is a problem now. It's called a rock and a hard place even if you were predisposed to bring these men home. Did the Roman soldiers come home? If you check your history the Roman Legionaire served for 25 years. Actually that is very similar to the current time in the military for the average "lifer". What are these faces going to do when they come back to this country. When they show up on the doorsteps of house in Fort Campbell Kentucky....or Fort Leonard Wood, Missouri. They hardly know their wives and children that they have missed being with during some very critical years of marital growth and parental bonding.

We have tens of thousands of troops and mercenaries now returning that have virtually NO support for the adjustment to the stateside rigors of becoming a civilian again. Alcohol and drug abuse is unchecked as the pressures of a jobless recovery stateside becomes apparent. Many will manage to adjust and blend back in seemlessly to the daily work environments. They may possess a skill that's in demand. On the other hand there will be a large number of these men and kids that are going to be the "odd man out". They are not going to have their buddies watching their backs anymore. Its going to be very difficult after years of overseas deployments where you had your built in support systems and you daily purpose outlined for you to handle going out with limited skills in a jobless market and putting food on the table for a wife and children that need you now more than ever.

The Politicians that sent these men overseas have done little to provide support for many of these legionairies once they return stateside. Is it a concern to the politicians? It should be. Many of these men are skilled in the art of war and in the art of mass destruction.

I think we have entered a phase of our Republic that will need to continue war and occupation. At least for another decade to provide a means to keep these men employed and NOT stateside. At least until they can draw their pensions. That is going to be key. For without pensions and health care, many of these men are going to be in trouble. Wounded psyches from decades now of killing and occupation are bad enough. But you bring these men home from these wars and discharge them into this economy and you have a recipe for disaster. We have right now an extremely high level of suicide and homicide in these men and the pols are scared to death of this predicament. I hope that you realize that I believe even though these wars are draining our treasuries and creating enemies for us abroad everyday, that it is unlikely that these men are going to come home......unless......they are needed here.....and that's another story. gl

GDP...U.S. ECONOMY EXPLODING


Don't worry now its all getting better. Better than estimate GDP growth of 1.8% should make you feel warm and cozy. This is all about how CONfident you are and this game is sliding downhill fast. That's no what we are concerned about. We already know this game.

What is the path going to be for the world economies to shake out. This is all being managed for the first time in history on a coordinated basis. Never in the history of the world have central banks had this much control of all the world's economies. Its the greatest economic experiement ever. Even China's central bank is cooperating. All the economies are intertwined and their very political survival depends on trying to keep their economies afloat. Balancing the forces of stagflation and deflation are creating imbalances within their countries and will continue to. Eventually the imbalances reach the tipping point and the whole house of cards comes tumbling down. Meanwhile we play at the casino table.

I know there is the possibility this house of cards comes tumbling down at anytime. Of course those of us that view this cleansing as positive for the future want to see deflationary wash of the excesses....BUT...this can is going to get kicked. Its sick and its terminal but its on chemotherapy now. Hold EUO as a hedge for example if the panic or fear kicks in. Hold dollars. Hold UUP. More importantly you should have physical gold or silver.

ANV GPL charts look positive. Let's see if they hold.



Thursday, June 23, 2011

THIS IS WHERE IT GETS KINKY


No I don't mean Ben pulls a three-way. Its where Ben pulls a rabbit out of his proverbial ass. Now here is the problem. Everytime Ben pulls a rabbit out of his ass he has to visit his proctologist and it starting to run up quite a bill for him. Ben spent a major portion of his life studying the Great Depression while he burned bowls with his wild and crazy hippy buddies at Harvard and MIT. These guys were preparing for the future while they lived the purple haze in the hallowed halls. It wasn't pretty but by the time it was over, Ben was a well-healed soldier. After the appropriate "cleaning up" and grooming at Princeton our Ivy League scholar was prepared to be brought in by the big boyz into the real "lever-room". So here we are. This is where the rubber meets the road for the man of steel. He's even able to stand up and face Q&A after a rugged day at the FOMC. This type of metal is not to be dismissed. After facing withering questions from the likes of Steve Loserman from CNBS one can only speculate how long Ben can hold up under this type of blistering cross-examination.

Of course he was able to not only defend our current monetary policy but managed to educate those of us in the wilderness of ignorance once again how monetary policy has no effect on the cost of essential currently and that inflation is under control. Of course he expressed displeasure and surprise that there has not been more job creation but of course we all know that will change in the latter half of the year. Meanwhile there is a slow sizzle going on in the Eurozone and the bankers just don't know how to pull all the levers to get the creditors off scott free in all the PIIGS. No problem though.....they will....One way or another the bulk of the fallout will land squarely on the peeps. The test run in Greece showed the boyz how much stomach the Greek peeps had for a fight. They're a little more nervous about those damn Irish though so my guess is they are in for another test soon before the move on the the volatile Spanish.

Enough levity let's get down to business. IF IF IF we saw the bottom in the miners this year then there is more fun to come, but if you're a short term trader I hope you were pulling some profit yesterday. They gave you a gift. I probably stayed to long in some but I did pull back some cash. The "pair trade" of GFI EGO is going as advertised....rarely do these pos rise in tandem...rotating them is a strange way to play a "pair trade" but it has worked with these range bound dogs.

GORO, GBG, ANV , EGO showed some very strong volume and moves off of this bounce which is hard for the boyz to disguise. I guess we'll see. I own a lot of miners....RIC looks like a buy and hold but I'll trade it too.....RIC has no dilution as Joe noted.

OK OK....is Ben going to pull a rabbit out of his ass? answer YES..... but it gets tricky now. QE2 was a political no brainer for him but there may not be another overt QE......but make NO mistake there will be NO STOPPING QE and monetization. Who's going to buy those 200 BILLION/month of treasury debt. Without it there would be an immediate liquidity freeze. The only questin is what kind of rabbit comes out. It won't be pretty and it won't smell good. (sorry that was cheap) The reason it won't be pretty is because the tricks will have less and less impact. Things are getting dicey gang. You can't get those jobs going. You can't get those houses turned around. This ship is going down...its just a question of how and how fast. gl



Wednesday, June 22, 2011

WHO LET THE DOGS OUT?


Let's turn off the noise and look at the charts on the miners. Your ears may hear the media sounding multiple signals of gold and silver's demise but the longer term charts on the metals are still in a bull market. If you have studied the fundamentals of the precious metals trade then one has to be encouraged here that the miners may be forming a significant bottom. Are they really though. Or is this another false bounce in them.

There is certainly evidence that some of the miners had some serious short covering the past couple of days and the big hedge money may be taking off the short positions after crushing the weak hands and taking their shares. Nothing like a stiff dose of fear to make holding a sector that takes a 30- 40%beatdown to remove your appetite for holding on to the trade. Is that what happened? Or is this a longer term move that still has some severe pain ahead? One thing is certain. If the PTB intend to extend the Keynesian experiment in an attempt to sustain the global lifeblood of liquidity then this is VERY likely a trade you want to be in for the remainder of this year.

However if you believe that they can't carry the facade for another few months and the meltdown in the liquidity will transpire very rapidly then cash is your play right now.

Put up the 3year 2year and 1year charts on $GOLD and $HUI.

Now for the Greek noise. Can you believe that civil unrest? lol Heck...the "protesters" couldn't even muster enough energy to wait in front of parliament before half of them went home to get their naps. Did you like the energy of the Greek citizenry. My guess is our masses will do the same. As long as their bellies are full and their minds are occupied by reruns of American Idol we will keep the system intact and the casino lights on.

Tuesday, June 21, 2011

MAD MAX TIME?


Not quite. I say Ben has more rabbits. Greece and the debt "restructuring" will present only a temporary speed bump for the "Great Maestro". He can juggle this problem with his eyes closed and his hand on the Magic Fiat Machine. So don't worry gloomers. Its all under control. You can rest tonight with your stacks of foil wrapped greenbacks safely stored under your mattress a little longer. Just make sure your neighbors don't know you have that fiat and those gold bullion coins in your house or you may find Mad Max is closer than you think. For now you just need to pay attention to accumulating food stores and more gold and silver.

The Kondratiev winter is getting closer but there are still some loose ends that need to be tied up before the true power flush all of your excesses down the toilet and buy your precious assets for pennies on the dollar. This kind of Supercycle does not end so easily as a little Greek debt unwind......no....I think they can prolong this game a little longer.

Of course I could be wrong, but if I am, then its curtains for your trading accounts anyway and Mel Gibson time begins. So let's try and focus on where we are. The miners look terrible, but then that is how bottoms are formed. They are being manipulated down for a reason. To shake you out and make it possible for the big boyz to buy (accumulate) on the cheap. They may get cheaper but if you don't have a position then you should be buying a position now. GFI ANV SSRI SLW may get cheaper but we are at a place that seems reasonable to own them. Keep a large cash position in case they take a real beat down but this is getting into a buy range. Remember this is paper and like all paper trades you have NO control over the ability of the big boyz to bust the PM miners much lower. If you don't have the stomach for it just use your fiat to buy bullion here.

This Greek mess is a true disaster but "they" have known this for a long time and there is a game of high stakes "chicken" going on. In the end the "true power" will win this round. Sure, its only stalling the inevitable but there are reasons they are wanting this to get kicked further down the road.

Don't forget EUO if they do stumble here it could explode. Even with some time of patch on this leaking tire, EUO should start moving up sincel everyone will know its only a patch. gl all

Monday, June 20, 2011

QUIT DIGGING


What do you tell some one that is on the wrong side of a trade and keeps adding to his position. Often time a trader is so sure of his fundamental and/or technical analysis that they violate their own predetermined trading rules to try and "make it fit".

If for instance one has determined that the major support for an index that they have a position in is violated they know that a danger zone now exists. They could sell their positions or at least a significant percentage and wait to see if there is buying volume and the stocks cross back over to confirm the broken support as resistance once again. Unfortunately many traders refuse to believe what they are seeing on the charts and try to add to their positions to try and catch a bounce at these levels. After all how can it not go up after it has corrected over 25%. Well we all know the answer to that question, yet many retail traders make these same decisions over and over.

We are in one of junctures right now. Many of the miners that we have been playing such as SLW SSRI GPL ANV etc. have corrected as much as 40%. Those are bear market numbers...so one must take notice. Is this an attempt just to push you out of your shares on a short term basis or is this a much larger correction coming for the miners. I happen to believe that we are nearing a bottom in the miners that will at least provide you a nice trade. On the other hand I am not willing to bet the kitchen sink on it. I established a trading core about a month ago and have tried to trade around it with limited success. After taking a beating on the core for the past several weeks I am not going to chase the miners until the boyz show they are ready to shut down their short position. Until we see evidence of miners performing better on overall down market days with volume confirmation (like GPL and PZG lately) then it is best to stand clear and wait with your precious fiat. Would I try day trades on paricularly bloody days on individual miners? Of course. GPL was an excellent example of that a few days ago when it touched 2.55 again. That was a very profitable trade. On the other hand longer positions just show continued leakage and catching a falling knife right now may apply.

If you are all cash and are not a quick trader in front of a computer then establishing a core now may make some sense. Otherwise we may still have a little more blood in the streets to be established in the miners before the trade resumes.

Physical is to be bought now however and that is not debatable. gl all

This chart is a must look...look at friday's volume confirmation at the turn off the 200ma


So is something brewing?

Saturday, June 18, 2011

TEN YEARS FROM NOW


For those that wish to look ahead a little further than the next trade I thought I would spend some time with the longer term outlook. Where will we be in the next decade? After all what's the point of making these trades and trying to position yourself for the future if there is no future. That premise seems simple enough.

So let's assume that the Grand Mega Economic Supercycle manages to clean out our excesses and rearranges our landscape without destroying the majority of this earth's inhabitants putting us into some form of neo-ice-age. I think that most readers inherently want this planet to not only survive but to continue to transform itself in a more favorable direction.

This is what Supercycles are known for....HOWEVER....A bear market of Grand Supercycle scale should be of sufficient magnitude to be accompanied by a severe economic recession. The last Grand Supercycle was terminated by the bursting of the South Sea Bubble and Mississippi Bubble in 1720. This was followed by a period of economic stagnation which lasted over 50 years, which is longer than the length of the Great Depression. If the Grand Supercycle theory is correct then the magnitude of the current recession should be of greater magnitude than the Great Depression, and possibly of greater magnitude than the severe economic recession from the 1720s–1770s that terminated the previous Grand Supercycle of the Renaissance.

I wish to challenge this. I want to look at this from the standpoint of the underlying changes in technology and the impact that this can have on how we come out of this in terms of the timeline and in terms of what the "other side" may look like.

Do I think the next five to ten years will be ugly? Yes....but what will be driving force out of this? Of course it will be technology......and it will be an exponential change in areas of nanotechnology...biotechnology....and artificial intelligence that drive us over the next ten years.

We now have billions of computers in the hands of young minds all over the world. When you place that much power in that many hands you are going to find that the explosion of advances and innovation will be astounding during the next decade and beyond. Imagine villages and cities in developing nations with intellects that previously were left to lie fallow without the benefit of attending the finest western universities to contribute the next "great thing". Now we will see what happens when you marry the internet, the cloud, and exloding chip capacity with Ruwanda.

Look at the abysmal failure of our own "higer" educational system to adapt to changing planet. How did we take some of our greatest institutions into the twemty-first century? Well one absolute anchor created from a "wealth in decadence" standpoint was the LEGACY system in these famous institution. Enormous percentages (as high as 50% in some institutions) are filled before any application is made. That's how George W. Bush was able to attend Yale and Harvard.....I wonder who missed that slot.

With the connectivity and computer generating capacity available now we no longer are going to depend on this antiquated educational system for our "next change". That change is already happening and will explode during the next ten years. The "social medias" are where a lot of this will emanate from. In fact the "social media" is being created by "college dropouts". We will be able to marry pockets of innovation through our connectivity to provide the an exponential move to actual development and production. We have countries with enormous populations of engineers and labor that are eager to begin for example the "next generation" of solar panes and wind turbines and fuel cells etc.

The same breakthroughs in speed of change in medicine is occurring with biotechnology. Look at how rapidly the outbreak of swine flu was contained. Literally stopping its spread with the vaccine developed and IMPLEMENTED in just a matter of a few months.

Many aspects of this change are going to provide a threat to the current regimes and political structure of the PTB. They will have to adapt and I am sure they will. You and I as investors must see the future. Near term its going to be ugly but if we get through this the opportunities are going to be enormous. The next Google...the next MSFT...the next Facebook....they will be bought for pennies on the dollar during the next few years. Some kid sitting on the Serengetti may be dreaming the next "big thing" on his computer. We have to get through to the other side first. gl all

The following article must be carefully perused and it fits well with what Joe Red and myself have postulated to usher in QE 3.......its a dooozy of a ride.....gotta have the cash if they push it to that level in two mo.

http://news.goldseek.com/GoldSeek/1308238838.php

Friday, June 17, 2011

PREPARATION


Just a brief note while I am on the run. Working nights so will not be on until afternoon. As a reader of this blog you must be aware there is a reason that the PTB is kicking the can down the road. Its not very complex. Simply put, they can't fix the "problem" and they want to buy as much time as possible to "find a solution" even though they know there is not "a solution". In time we will have the solution. A lot of pain. Forced austerity. Yes, that's right all of you that have decried higher taxes will get them. All of you that believe your government pensions are safe are going to discover they are going to take a hit. Everyone of you with 401Ks had better think long and hard whether that money market when you go in cash in it can withstand a systemic liquidity event. So do you really want to go to "cash" in your 401K if the SHTF??

In true liquidity events where counter-parties are put at risk with no transactions possible the "system" seizes up. It has never happpened on a global scale and I doubt that it happens this time, but it is definitely a possiblity. We have never been so globally tied together as we are today. We were not this intertwined in the 30s and this poses a "systemic risk" of unimagineable consequences. I hope that the PTB can stave off this outcome but I know the CONfidence game is everything and I wonder if that can be maintained when they begin flushing this monster down the toilet for its Supercycle cleaning. These type of events can provoke unpredictable outcomes and the doomsayers advocating stores of food and water certainly have validity. As far guns and ammunition I wouldn't go overboard. Spend your money on food.

The market is building energy for a nice rebound. Will we reach new highs and totally destroy the "non-member" bears? Maybe. This market has become more treacherous and is going to begin the process of destroying the remaining participants. Miners are oversold and now need to bounce and they should get a tradable move soon.

Physical metal is your only secure "investment" so play in the casino at your own risk. If you are not spending time with your family then you are wasting precious time. gl gang.

Thursday, June 16, 2011

FEAR!


Now it gets serious. We have the octagon fired up on CNBS. We have the commentators like Melissa Francis (ex-Little House on the Prarie fame) now questioning her unrelenting thesis that oil prices rising did not hurt the economy. I still remember her giggling when oil was rising over 100. It shouldn't be surprising that CNBC has the triumvirate of Joe Kiernan, Becky Quick, and Carl Quintinilla giving you the morning business spin. These aren't people that are there to report the news. They are there because they spin a story, and we all know what that story is.

Its almost funny now if it weren't so tragic. They have spun this version of the "truth" and what benefits "free markets" for years. Its the old Gordon Ghekko theme of Greed is good. Give the very largest predator in the pond all the food and a little poop will trickle down to the rest of the pond. Tell the rest of the fish in the pond that they are big fish and they'll believe it......until they are gobbled up one day.

This is a market and as markets go so goes the squiggles. Right now we are showing some evidence that the miners are showing some strength. Maybe the core I am holding is going to stop its bleeding. I still like the physical ownership more than ever. The miner's shakeout has been expected, but it always feels painful and FEARFUL. Get you out of your shares here. I know I lightened up slightly on some positions. EUO is still on as a trade and will be at least until Monday. Tuesday is the announcement day for the Greek showdown. Take care all and gl.


watch the second half on the game

Wednesday, June 15, 2011

BEN WE NEED QE4


Forget QE3. I want to go straight to QE4. This is a serious market decline and WE need help now. How do we pay bonuses this year if you don't turn this market around. Not only that, but what about all the work you have done to create this "Faux Recovery". Its not going to be long before all the pundits that were praising your monetization of the debt will be saying they knew all along it wouldn't work. Once that begins then you will have a loss of the all important CONfidence of the peeps. The loss of CONfidence is ultimately what will sink the country into all out deflation and that is what they are trying to kick down the road a little further. They know its coming but they will pull out all stops to kick it to 2012.

We are getting our 3-6% intra-day moves soon as we build some fear into this market. Trading this will become very difficult to put it mildly. As Red has said only a few fleet of foot day traders will be able to withstand the volatility and the absolute deception that will be built into the next market moves.

We are still looking for a bottom in the miners. We'll see how they handle the low touched two days ago just below 500 in the $HUI. This should happen today. If it bounces off this area again then we could see a real nice multiday move. BE CAREFUL. I am not sanguine about this market.

China is starting to break down in its social order as we import our inflation/stagflation. This will not end well if China starts on fire. gl all

Courage is resistance to fear, mastery of fear, not absence of fear.
Mark Twain

Tuesday, June 14, 2011

SCOTTY GIVE ME WARP SEVEN

I want the maximum speed to escape the gravity of planet Deflato. It has the strongest gravity pull in this solar system.

The problem is their is no power capapble of pulling you out of its overwhelming forces. The continued drop in housing is a murderous negative feedback loop. Our fearless economic wizards made the decision to use housing as its peg to the last big liquidity expansion AFTER the 2000 market crash. They needed a quick fix to pull us out of the depression that was certain to follow the 2000 crash and they found that expanding the derivatives game that was already going strong from the mid 90s could provide the necessary push to expand the economy. It was aided by several key decisions by congress including the repeal of Glass-Steagel (widely applauded by the media and fortune 50). The rest of us just sat and watched American Idol and football.

Once the derivatives were given the greenlight by Greenspan, the bankers took the raw meat and turned the leverage into the stratosphere. Some of the IBs went from 10X leverage to 100X leverage. Thats right 100!! When the home prices began dropping there were many on the "know" that started rushing for the doors in early 2007. The big boyz were already shorting themselves heavy and the slaughter of the sheep was underway. Mom and Pop never knew what hit them. Even during the manipulation of the previous decades there had never been such a completely coordinated fleecing of sheep by government and Bankers.

So here we are looking at the retread faces of Wilbur Ross and Warren Buffet being trotted out to put a face of sage wisdom on the "recovery" for the sheep to digest. Today we are going to enjoy the game. Its a squeeze, probably multiday...probably through early next week. You can play it just like you have the past few weeks. This game is now in the stages of desperation. Strip out the fiat challenge of silver and gold but paint the tape for the market (for a few days). Don't fall in love with the long side. Cash is king (for a little while). Enjoy the squeeze today.

Monday, June 13, 2011

GREECE!

Its the new white meat in town and its about to be fried. Whether the can gets kicked or not there will be fire. The smell of austerity is starting to drift across the continent. If I had all the answers to what will happen to Greece I would be in my yacht off Corfu downing a couple of gin and tonics. I can tell you a couple of thoughts and that is Greece will end in default and it will be handled as a "repackaging" of their debt. This will be a trip wire for the collapse of the Euro. Watch the riots begin now....its summer. Its hot and the public cannot be suppressed with smoke and mirrors forever. Without the debtholders taking a beat down the riots will begin to spill over into the other PIIGS this summer. I cannot predict the paper trade in gold and silver. The forces that preside over these trades is still in control. Unfortunately for them the internet is disseminating too much publicity on this trade and the physical metal is being accumulated. It can still be manipulated so never underestimate the strength of the boyz.

Given the cycles still in play one can expect Ben to pull a couple of more rabbits out of his hat before the Kondratiev winter begins to roll across the landscape in earnest. Cleaning is a universal business. Its performed along all sectors of life and is a very necessary function. Now our time is about here and I want all of you to know that participation in the casino is going to be extremely dangerous from here on out. Ben claims to have removed your QE training wheels. He doesn't need QE for the bonds if the market is tanking and deflationary collapse begins. The bonds will do quite nicely for awhile. Equities are a different story. As liquidity begins to dry up expect dramatic movements in the equity markets. 3-6% moves will become more common intraday. The beast will be unleashed again and it is hungry.

I cannot tell you it is now but it is gettin closer. If you wish to continue down the road shorting the market just be aware that the swaps and liquidity that supports the money markets and your favorite etfs is absolutely a house of cards. They know this and CONfidence is essential to maintain their function. Its everything. If it is lost then our little game is over and the K winter begins as a blizzard from hell. If you are reading this and you stay in the game then you better be praying that Ben and the boyz hold it together. If they don't then you will have nothing in this paper game other than dust.

We should be getting close to a bottom in the miners at least for a trade. The safest route is to pick some of the solid players like HL EGO GFI EXK and try to daytrade them. 20-50 cent moves can be nice change. Just pick your spots. EUO still looks like a play and may prove to be a winner this summer. nibbling on DTO may work too........but ONLY nibbles. gl all

Saturday, June 11, 2011

WEEKEND PICNIC update I....C A Fitts link

A time to rest and relax after a week of the typical Banker's Beatdown. I hope your wounds are healing. Had we listened to my advice a month ago we would be sitting on overweight cash waiting to see the whites of their eyes. Or maybe we would be in EUO this week. This is the game. A lot more serious events are unfolding around the world so you should put everything in perspective. Here is Immred's take this week.

As to Ken's comment, Joe pointed it out to you Kli, it's "FEAR". Playing the fear card from not getting on the boat to not getting off the boat fast enough. Totalitarian policies cannot be enacted without the consent of the sheep. Best tool is fear when the circuses no longer entertain and there is no bread left.

It's much easier to change the news and events the public perceives to fit the cycle , than trying to change the longer term cycles themselves. Notice the lack of Fuku nuke news, yet plenty on Syria Insurrection and Wiener news.

Basically the broader market is completely controlled with chosen insiders allowed to lead the up and down cycles, plus keep the trading profits for managing the interests of the cabal. Since funds are mostly electronic, they are literally created out of nothing for a brief moment and then disappear again, though the trading profits stay for the facilitator. The casino is rigged, deal with it and move on. If you choose to play when the dice are heavily loaded you should be willing to accepted the consequences.

That is one reason why I believe Joe prefers the smaller POS stocks, they function more logically with real money involved, since the heavy manipulation is on the index components. All plays are high risk except the POS high betas have a slightly higher rate of a return like in Black Jack.

Also the weekly RSI and MACD on the SP500 has some room left to go down before it can turn.

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=sp500&x=63&y=10&time=8&startdate=1%2F4%2F1999&enddate=6%2F10%2F2011&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=1&maval=20&uf=8&lf=2&lf2=32&lf3=4&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11

During the deflationary collapse starting sometime between 2011-2013 all equities will get slapped due to a lack of liquidity. So don't get to attached to any alphabet soup holding for more than a trade with an exit plan.

Lastly but not leastly....you might just want to take the time to read this link....a very complete and telling tale of the CLUB and who THEY are that I have talked about in the past. This is Wall Street. This is how you are going to make money. If you want to play with the big boyz then understand WHO the big boyz are. I am not putting this up for your self-righteous indignation so save the cries of foul for someone that gives a shit. This is the casino we are in and this is the game you and I are playing. Read it and NO BITCHING! Stay at home if you don't like the HOUSE.

http://www.10sigma.com/files/Martin%20Armstrong%20Biography%20May%202011.pdf

Fitts....a more detailed and eloquent version of the above...some of you have seen this posted before here...but Paladin brought it today

http://dunwalke.com/1_Brady_Bush_Bechtel.htm

Friday, June 10, 2011

STAGFLATION!!

Or the proverbial "Rock and a Hard Place". That's where our economy is. Trapped...like a rat on a sinking ship. Its goin' down! Ben knows it too. But he has two more years in his term and he was brought in here for a reason. He is a Keynesian specialist. His PhD was largely studying the Great Depression and make no mistake this is what he was groomed for. The PTB had their eyes on him for years. This cycle has been coming for years and its going to play out just as designed. These are no accidents. They are not random events that occur as a result of "unplanned events with unintended consequences". These are economic cycles designed to benefit the few at the expense of everyone else. That is the game. That has been the game for hundreds of years and will remain the game. It is so written.

Now back to the game. No short term crystal ball so you are at the mercy of the markets today. I told you we would be in a prolonged consolidation in the precious metals and miners. This is the fourth month of the miners correction and its been very impressive. If you have kept your patience and not expanded your miners core until the whites of their eyes have been seen then I congratulate you. My patience caught me leaning last week and it was costly. Fortunately I'm still standing but the six day drop was impressive. The charts say we get a bounce if the $HUI hits 490 so I'll stay tuned. Other than some day trading attempts this casino is to dangerous to do anything other than watch your core right now.

Martin Armstrong's call of June 13 is still in play that should be interesting next week. The confluence of several events makes next week a great week to sit on your hands.

I still like EUO here and YCS as currency plays. Just don't go crazy. gl all

Thursday, June 9, 2011

BEN ROBERTS

This was a rather long and well written post on comments that deserves its own post. kliguy38 said...
"We will always have fiat and we will always have a fractional reserve system to steal your money. If gold is the standard then they WILL leverage it and destroy over time whatever fiat it underlies."

While I enjoy immensely your superb analysis and commentary most of the time, I beg to differ with the above comments.

The fundamental issue here is power. Money is power and the kind of power that can and has purchased political power. If you want to defeat the bankers, then a free people must come en masse to understand that any form of concentrated power is inimical to the interest that free people anywhere and has been at every point in mankind's history. This is the axiom, premise, or foundational prerequisite to a just political and monetary system. The idea is to keep the power spread amongst the people, broken into the smallest units possible, whether it be monetary, political, or the power of knowledge. It has always been the concentration of power that has led to the dissolution, destruction, and deterioration of all civilizations; their rise and fall. Until mankind grasp this concept on a broad scale we will never defeat the bankers, the elites, or their correlative political henchmen. So when forming a government, the people must make as their first principal the absolute necessity of preventing the concentration of any kind of power and/or monopolies of any kind or form.

When anything is legally permitted to act or function as money, as is every individuals contractual right, you have made it virtually impossible for any kind of monopoly or concentration of power. Under such circumstances, then almost anything can act as money, the only caveat being that the contractual fiduciary relationship be honest and involve no fraud or deceit. Formally and legally in such a system you might have competing forms of money in the form of any kind of metal that has value. Gold, silver, platinum, copper, nickel, whatever could be used as money. Also, warehouse receipts,coupons, tokens, bills of credit, all have been used as money in the past. So, the simple principle is as in the division of labor, let there be a free division of monetary power in whatever form people may contractually care to establish. If people have control of their political system they can easily outlaw any form of fractional reserve systems, such as the Comex, SLV, The FED, Gld, or any form of hidden secretive non transparent market such as derivatives. The key is knowledge the ultimate form of power, and that power being fully divested with every member of a body politic. We can form such a society now that we have the internet.

Remember for five thousands years both GOLD and SILVER have been the most preferred form of money. Both have been debauched when the power has been concentrated in the hands of a few, as in the Caesars of the Roman Empire.

Thankyou Ben. The problem is we are NOT a free people, and if you think we are then you obviously have missed most of the last 30 years. Especially the last ten. If that isn't clear enough you had an exclamation place on your lack of freedom in the Supreme Courts decision giving corporations status as indiviuals. That just "told" you that you are owned. To regain your "freedom" is NOT possible without a complete destruction of most of the people residing on this earth and only nature can do that....... I admire your writing.

DEFLATIONARY COLLAPSE

Yes ultimately but just not today. A lot of pain is in the air as the wound licking begins to reach a fever pitch. Don't worry it'll get worse. This game is all about pain. It always has been. It's one of the tools of the market masters. Right now the only pain that really matters is the "little guy" out there that is trying to keep or get a job and put food on the table for his wife and kids and a roof on their heads. The rest of this is only a game. Remember that. Unless you are in that group...take a back seat in the bus to hell. Because that's where we are headed.

Very bearish moves in the Miners the last few days. One of their favorite maneuvers is to drive you out of a sector with a particularly prolonged and severe beatdown pushing the sector to collapse then slowly takinng it up in a controlled manner. Many will sell on the "dead cat" bounce. Then the big boyz have it all to their selves until they cross into new bull territory again. Is that what's going to happen this time? Maybe. But I still haven't seen the evidence this bloodshed is over. For what its worth Hold that 50% cash tight here and see if we get a particularly bloody day in the next few days for at least a trade in you favorite long plays. In this case the miners like EXK AG SLW SSRI HL etc. HNR holding well also LNG GETTING TASTY. But this is a butchering so trades only.

ECB still playing games with the rate increase next month. Watta joke. Jawboning that piece of shit mess still. Have fun this summer. This casino is getting mean. gl

thnx klc


but they deserve it....hehe

Wednesday, June 8, 2011

BERNANKE'S NEXT MOVE


If you listened to Ben's speech yesterday something jumped out that I thought was very telling. Why would Ben spend an enormous part of his speech giving a primer on the costs of essentials. It was bizarre to listen to him go out of his way explaining how the costs of essentials like metals and oil were becoming more expensive due to the demand side of the equation. He even went into the costs of food. Making a case that the demand of food by the ever increasing dietary demands of our emerging markets around the world. Is he right? Of course....at least to some extent the price of these essentials is due to demand. The question is really WHAT PERCENTAGE OF THEIR COST RISE is due to demand. Ben then went into a very bizzare defense of his policy by making a dollar devaluation explanation. Pardon my numbers but I'll take the liberty here of my memory. He used the percentage of devaluation of the dollar (around 16% was his number) and then compared the percentage of rise in some of these commodities. Many up 100%. Then he dismissed their rise with an apple to apple comparison of these two percentages. SERIOUSLY!!. Do you really think we are that stupid??? Wait..don't answer that. Of course he does. And he's right. We are. At least the majority of the sheeop are.

Let's get to the point of this. First his money printing is the issue and IT is what is rolling into these commodity markets and inflating their prices to this percentage. The actual demand of many of these commodities is actually DOWN. Oil demand has been dropping for months but the price has been tripple digits. All hard commodities are down but the prices are higher....maintained by the mad money.

Ben's bizzarre comparison of saying the dollar is down a few percentile and these commodities are up over a hundred percent means it cannot be his policy of easy money and monetization. Something ELSE is the cause. This is clearly setting the stage for another round of QE. It may have a new name but its coming. There will be no choice except immediate depression THIS YEAR. He knows it too. And folks its coming fast. Just watch what happens if he delays this into September. It will get bloody fast. Ben has no tools other than money printing and he WILL print. State and local municipalities need money and they will also start firing people like crazy this summer. Its going to spiral fast. CONfidence can evaporate overnight so you cannot let this go to long. Ben knows this. Let's watch how long he sits on the sideline. I bet it won't be too long.


See if the guy below sounds familiar......

Tuesday, June 7, 2011

ITS GETTING VERY WARM IN EUROLAND


This is something to mull on tonight....if we hit the top trend line on this chart( thanx MACRO blog) then It will make a nice gamble ....especially if you have a miners core .....disclosure i own EUO.hehhee..letum pump it...I can wait....

QE3 CONFIRMED


Richard Fisher on CNBS confirmed that the Fed will continue their rollover of over 900Billion in MBS on their balance sheets. In other words....propping up the Treasuries will continue. Fisher admitted that QE2 has been a failure. That the liquidity created has done NOTHING but stay on the Bank's balance sheets. It's obvious to me that Mr. Fisher did not understand the very purpose of QE 2....it was ALWAYS about the biggest banks balance sheets. The debt holders of these very banks are the owners of the Fed. You can do simple math. The purpose of QE2 was always to butress the balance sheets of these banks. It wasn't that diabolical was it. It seems rather clear their purpose. Restore the balance sheets and make sure they are strong enough to get through the coming cataclysm, that they essentially created. I love it. Really its not that difficult to see is it?

Consolidation is still the game in the market. We are not going to crash. It may feel like torture to you if you are in the Precious Metals trade (as I am) but its more like "enhanced interogation" for those neocons that read this blog. We should experience a little further pain in the PMs if the MACD rolls over on the $HUI then we'll have a nice double bottom in the next week. Stay and Play....the waters fine will be their mantra soon. This is an evil game if your money is vital for your survival. If you NEED your money then this game is NOT for you. This is another trader's year as last year was. Consolidation/Accumulation is designed to make you lose confidence in your trade and that is what they are doing to the miners. Just go back and look at last year.....then look what they did at the end. gl all

Monday, June 6, 2011

IT'S STRUCTURAL STUPID!!



Before we get into this week's market plays a brief word to those that still think we are on the road to recovery. We are driving this bus further over the cliff and still asking the same people for directions. Some sensible people may as the appropriate question who got us? Big business? Big Government? The Socialist(whoever the hell that is) Big Labor? (yeh right) Sure.....they all did and more. Greed and stupidity. Most of which we can look into a mirror and take full credit for. Many of us voted for these clowns over the years and worked tirelessly to support their ideas of "free markets" and "deregulation"......while your country was being picked clean by the money interests. In 1980 there were just a little over 3000 registered lobbyist in DC. Today there are over 300,000 registered lobbyist in DC. Do you think they are adding to your country's future well-being?

My next line should be "If you want to fix our structural problems then money has to be removed from the control of our government". Seriously? Do you think I really believe that it is worth the time to even bring that point up? Why? This game is over. It was over a long time ago and we just watched it happen. So all of you can go back to your coffee an bemoan your devaluing dollar and chinese goods you're consuming today. You can watch your MSM give you shots of Sarah Palin in leather and a motorcycle while your country rots and the world burns.

I'm playin' in the casino today instead. I like to watch numbers. Its a fascination for me. Right now I see a base forming in the miners and its a big one. It "could" go on for several months so don't get in a tizz. I'll let CNBS chatter about all the hoopla surroundin raising the debt limit. (nonsense...of course they will) Let the Middle East breakout into full blown Civil War. Oil needs to be even higher to fulfill GS' 135 call. Along these lines that's why Joe's new darling FCEL is worthy of some special looks. It's real. Its works. Its being used now for energy. Its cheap here and a position is to be HELD. Do your own DD but what do you really want to own in this crooked casino? ........besides gold and silver...gl gang






PART II


Friday, June 3, 2011

JOBS JOBS JOBS


Its all about jobs. At least until the report comes out at 8:30. The Challenger ADP report was atroceous and in many ways is more telling than whatever comes out this morning. Especially after the original estimates were tamped down for Friday's numbers after the ADP bomb. Obviously we are sinking. Why even try and pretend to give the PTB the benefit of the doubt. Monetization and NO fiscal policy in a deleveraging environment are recipes for failure. Synchronized World efforts to prop up a sinking Ponzi built up by decades of derivatives will only stem the hemorrhage. It will not repair the ruptured artery. Years of blatant lies and manipulation are coming home to roost.



CNBC will have their octagon going full blast before the numbers come out and if they are "better than estimates" a quick pump of the futures should ensue. If they are worse than expected then a red opening with a nice short squeeze later in the morning can be expected. Dollar weakness no longer is an indicator of the Precious Metals trade so hanging your hat on its direction is ludicrous, but you are welcome to participate in that charade. I don't even bother to look anymore.

The immediate trading parameters for PMs appear to focus more on the Eurozone machinations and right now that is a three ring circus with maximum obfuscation in process with daily predictions of another bailout..... so you decide. I'll go with the can-kicking myself.

Most precious metals blogs clearly see the future of the metals and miners trade after each trading day is over. Just remember this is an accumulation phase and flushing you with the action is the game..........so flush peeps and let them play their game....gl all and enjoy your casino





Thursday, June 2, 2011

CHOP SUEY

Turn the peeps into chop. Let's grind these "traders" inot the dust. After all they aren't the target of CONfidence DOW number that we are painting for the evening news. So lets stop shop these peeps and run the table on the newbies. There are plenty of newbie traders that have jumped on the "over two year bull market" created out of an illusion of "recovery". According to our economic cycle theory we have another year to go with this illusion. Of course that is giving you cycle theory the benefit of the doubt that it can predict an extension of the greatest economic levitation in history.

I hedge my bets with cash just in case they get a little too wicked here. More importantly I hedge with physical gold and silver but by now you know that drill very well. Today is another day in the chop shop so try and make your trades with caution as usual. The big jobs number is tomorrow so more than likely no major moves today. But I like the trades to make pennies on the gaps.

Turn off the noise and pay attention to your trade. There will be a lot of voices trying to take you out of your trade. I still like the miners here....even in the short term so take that for what its worth. We are in a danger zone as usual but if the game is to continue liquidity then equities still have a trade in them this year. Beaten down sectors like Chinese crap stocks will have their day in the sun this year so stay on your tows...LDK LLEN STP etc.......Be careful though.



PSLV and PHYS are accumulate on weakness and I continue to do so.......its your money so you have to be aware of this game to strip it from you.

The world is disintegrating in front of your eyes and the media is telling you its all just normal everyday business as usual. Well....in a year they are going to be in a landscape from hell at this rate. Keep trading the great casino. Its still open. gl gang

Wednesday, June 1, 2011

RELEASE THE PLAGUE!!

Why not? Nothing can stop the GREATEST BULL MARKET IN HISTORY!!!!! We've taken a complete revolution in North Africa and the Middle East. Governments that have been sustained by not only the Ponzi but their own sordid forms of torture and oppression. Many of these governments have been such an integral part of the Ponzi that we conveniently used them for our own rendition purposes during the last decade. After all if you want go medieval on your enemy what better experts to call on. Of course now these same governments are now villains as we begin a wash rinse repeat cyle for new "leadership". Had I made this post a few years ago many of you would probably think I was being unfair with our masters. Now you probably think I'm being too kind.

Turmoil in Euroland is currently being deflected like an insect. Breakdown of the Proles in Spain, Portugal and Greece is easily dismissed without even a 30 second bit on our evening news here. G7, G8, G20 meetings to deal with the proverbial finger in the dyke is only a passing weekend news bit now. Late Sunday currency props are now routine.

An Icelandic volcano erupts closing Eurozone air traffic routes and we yawn. Earthquakes and tsunamis level a developed nations infrastructure with long term Nuclear waste contamination of its lands and seas and we don't even care anymore.

An F5 monster tornado levels a midwestern city...the worst tornado in history and the market doesn't miss a beat.

100 year droughts in Texas and Oklahoma.....100 year floods in the lower Mississipi valley. 100 year droughts in China.... still not even a flinch.

We just threw 100 dollar oil at the struggling peeps and they laughed and filled up their SUV's with their Shell cards.

I think you get the picture. This is not your daddy's stock market. This market can only be stopped by......yup.....you're right.....Kryptonite. Without it there is nothing that slows this juggernaut down. Its SuperQ. The strongest superhero ever.

Today I'm going to pass on my search for some Kryptonite and pay close attention to some attempts at scalps on some of the PM miners. If they consolidate more at the opening I may try to pick up a couple for a daytrade....AG EXK SSRI SLW... EGO and GFI continue to act as longer term plays. I will keep 50% cash minimum throughout the summer. If we move up over the next two or three weeks I'll move even more into cash. Joe's OPTR looks like a longer term hold.....for now. Good luck