Sunday, February 19, 2012

THE WEEK AHEAD

My guess is we continue to remain in the triangle forming on gold prices as the market struggles to break above 1750 cash price. This is a consolidation phase in my opinion that is playing out. The market forces at work are not your typical buyers and sellers such as hedges IBs retail etc. There are much bigger players involved in this move and they are all trying to game the trade that is being played in the stratosphere of the Central Bankers. Ultimately the Central Bankers will allow the price of gold and especially silver to rise again, but right now there are some very big players using the Central Banker's price suppression to accumulate very large amounts of gold, silver, and PM MINERS at bargain prices while the retail traders cowers in fear of a massive beatdown occurring again. Another round of severe deflation in the near term AND an accompanying flush of the gold and silver prices is certainly possible. On the other hand this is a market that has a multitude of factors present that make this possibility less and less likely. Right now there remains in place a Fear factor in the precious metal trade. It has been carefully crafted by the boyz for a multitude of reasons that if understood, should give you some solace in your position as a long in this market right now. Of course there are those out there that rightfully so claim there is a correlation of the PM prices and miners with the overall equity market.To some degree this is true and it has been also used as a tool to keep retail and hedges out of the trade. This will eventually cost many people sitting on the sidelines waiting for the perfect entry a lot of money. Its the way the game is played. Its the "accumulation game".  As you know if you read this I have traded these miners and PMs through PSLV and PHYS throughout last years "run up" and "beatdown". At times my "core" became so low that my real risk to me anyway.....was that they ripped it higher without being on the train. I was lucky and the provided us all a nice fibonacci 8 month takedown. Now we MIGHT be starting another nice rise to new highs....you will not know for several months. So yes......you DO HAVE RISK. The second half of 2011 was used to flush all the weak hands out of the PM miner trade and used as an opportunity to accumulate these shares at bargain prices into the hands of the big boyz. There are no single cartel owning these miners. The usual suspects of course are there but there are a multitude of big players using this price correction to buy. You can watch the tape each day and notice the early day gap downs and price dips that keep getting bought with the prices frequently ending well off the lows of the day. These are stealth buying and really not that concealed. The current pattern of consolidation indicates this also as the strong hands remain resolute. Will there be a nice flush (probably only intraday) that really shakes loose some of the recent weak hands that might have jumped on this last bounce? Maybe....but if you are playing this without a core and waiting for this move then good luck. Maybe it occurs with a nice SnP equity flash crash of 400pts. Maybe ....

I have tried to put up charts that are not just daily charts but weekly and even monthly to show the doubters out there that these PM equities are far from overbought. There is a lot of room to move to the upside. We are in strange times and if money printing is bullish for the PM trade then you have to believe in the longer term hold that these equities and bullion represent. Just an aside .....LNG was a huge trade for me last year but it could have been much bigger. Look at what they did to it recently......driving LNG to 3 intraday a few months ago then reversing it and ripping it to almost 16........I missed most of that due to FEAR. I watched it that day it dumped and missed my opportunity. Most of you did too. That's what emotion can do.

This post is for those of you still in paper trading. The smartest readers out there are out of paper trading and into bullion and hard assets such as farmland and other metals like platinum palladium copper etc......good luck! I will be out of the area this week but will the tethered most days......graphics will be limited. until next week. Use the charts on this post for the week.

30 comments:

  1. Kli,

    Thanks for posting.

    I am off for some R&R starting tomorrow, but usually that gives me MORE time to post. I will try to look around the net for some things of interest to bring to your blog.

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  2. thnks doc....dont have my puter.....hand held...so no graphics.....will still post this week ...just no charts or pics....so i DO need help...hehehhe

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  3. Kli,

    Any thoughs on UNG? Looks like it might have hit the floor.....

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    Replies
    1. tom look at SGY WPRT ATPG LNG to trade as proxies for gas

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  4. The last 5 candles on AUQ:
    Doji, then a red candle, then another doji, then another red candle followed by a green bullish engulfing candle, and lastly a small doji. ? reversal of the down trend?? Looks like Gold & Silver are up today. Maybe the miners will breakout.

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    Replies
    1. Doc......these miner charts look fascinating from a short AND a longer term perspective after last years mega beatdown......time will tell if this is it.....BUT....those volume moves at the most recent turns were not to be ignored

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  5. very bullish move today with higher low forming with volume on GDX

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  6. AAPL is up 1.7% which is keeping the Nasdaq up. Seems as though everyone keeps thinking the markets should selloff, but they are not. I suspect those people trying to short need to keep covering. Who knows how high the PTB will take it.

    Nice move so far in AUQ.

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  7. The war on drugs. A new form of slavery. http://bit.ly/wOSZEO

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  8. check out the flu trend in japan

    http://www.google.org/flutrends/jp/#JP

    The euro/dx hit the top of the weekly downward channel since 8.28.11 and it backed down, it could find 1.28......this 8 month greek drama makes more sense on weekly charts like yours..

    cheers to all

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  9. Here's a stock that might be of interest. Phil Davis of Phil's Stock World posted today about FTR. He believes the stock will be accumulated.
    There is also an article from Seeking Alpha. The stock recently dropped its dividend nearly 50%, but it still pays an 8.4% yield.
    I haven't bought any, but will continue to do some DD.

    http://seekingalpha.com/article/382461-frontier-ready-for-a-big-bounce?source=yahoo

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    Replies
    1. not bad......would love to see a dbl bottom and hold

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  10. I continue to look at AAPL as a proxy for the Nasdaq. This AM, AAPL was down MORE on a percentage basis than the Nasdaq. Now however (11:15am), AAPL has recovered and is down LESS than the Nasdaq. If AAPL keeps recovering, the markets could turn green.
    The chart on AAPL shows a possible double top though.

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  11. FCEL in breakout.....next stop 2.5 area ....if it clears that then another dbl from there

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  12. gold spiking midday.....very unusual.....something is going on

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  13. Trader Dan wrote that if gold can get a couple closes above 1750, that that would be bullish. Maybe that is what is happening. We had the first close (ie, recent close) above 1750 yesterday.

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    Replies
    1. hope springs eternal doc....... heheheehe.....time will tell.....

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  14. many miners charts in review tonite look constructive short and intermediate term......in spite of the SnP overbot status

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  15. Phil Davis of Phil's Stock World wrote about oil today. He believes GS along with our MSM are pumping up oil. Phil believes GS is trying to convince "sheep" into long oil positions and then at some point, will collapse the market again. He believes that should gas prices rise to the 4-5 dollar range, the demand for oil will collapse. Also, he believes that there is an "oil glut".

    Here a a quote from his blog about the oil glut:

    "Oil producers are deathly afraid of oversupply in the oil market — an oil glut. Such a glut is happening in the North American natural gas market, shaking the energy globe from Russia to Iran to Venzuela. Since oil dictatorships derive their political power from energy sales, they cannot afford to tolerate an energy glut. Such a thing is far more a threat to them than contrived and ghoulishly elaborated rumours of "peak oil."

    The advent of shale oil and gas production has reversed declining US production, is now spreading globally, and can be commercial at an oil price of just US$30 a barrel. This breakthrough seems completely to have passed by peak-oil advocates. They claim the end of "easy oil", without noting that technology continually makes unconventional oil into conventional.

    Peak oil cultists are compelled in their belief — they no longer have a rational choice whether to "believe" or not. They lurch from one doom projection to another, compulsively feeding on a ghoulish doom that can never satisfy their ineffable hunger."

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  16. Silver is just on fire...

    Gas is $4.25 at cheapest station in san francisco..4.50 at Chevron already...

    I wouldn't dismiss peak oil as he states....Shale oil has added 1% of what we consume a day..

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  17. I wouldn't dismiss Phil Davis and his take on oil.....

    He may be right considering,

    from ZH

    http://www.zerohedge.com/news/guest-post-why-gasoline-consumption-tanking

    and

    http://www.zerohedge.com/news/guest-post-its-not-just-gasoline-consumption-thats-tanking-its-all-energy

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  18. Just thought I'd post this as well, Very good read, not that its not been mentioned here from time to time..... hehehe

    From ZH

    http://www.zerohedge.com/news/mike-krieger-presents-playbook

    It's well worth passing along.........

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  19. hittin the waves today and missin most of the trades but made a few to tweak my core......gl

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  20. PAL looks good for a move to 6 over the next couple a months

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  21. Tom, I saw that last week...

    Doesn't mean that Peak oil hasn't happened...in fact everything we are seeing in the ME is most likely because the easy energy is evaporating, the expensive stuff is now up....

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  22. If you are going to paper trade the casino then you have to hang on to a large cash position in case they turn that 200ma on the major indexes into a hard south charge. Many of the miners are showing evidence that they "might" have bottomed and are getting ready to break out in a series of higher highs and higher lows.....I'm just not convinced yet and won't make the call. I have a solid core of miners and will hold tight.sell structured settlement

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  23. remain short term bullish on miners........still don't see THE short term correction

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  24. Japan's financial regulator has ordered money manager AIJ Investment Advisors Co. to halt operations for a month after the Tokyo firm was not able to account for nearly $2.3 billion in pension-fund assets

    money seems to have more legs than andy dufrene

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  25. will view weakness in most of my miners as buying opportunity this week....to add to positions .....will continue to maintain a cash position for final flush but many macds appear poised to crossover on the weekly and this entire beatdown of the miners last year looks very corrective and completed with volume markers in several miners ......the massive printing is your key

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