Thursday, August 30, 2012

BEN'S SHOW TOMORROW

That's right....another rabbit trick. Unlike many out there trying to divine the maestro I find the better course of action to accept the inevitable and stick with your trade. We are in a deleveraging disaster and finding an out is going to go on for months and years. Trying to guess Ben's next move may be fun but it will surely cost you money if you are leveraged or overtrade you position. Whatever Ben says tomorrow will most likely provide support for PMs. If they try to paint a picture of holding the monetary purse too tightly then of course the PM beatdown and market beatdown would be severe. That may provide you the last opportunity to pick up physical sub 1600 and don't expect it to last more than a day or two. More than likely they have made expectations factored in for little action tomorrow. The more interesting period will be next Friday's job report. A very weak number would really set this market up for some Sugar. Ben would have a clear shot at the next week's FOMC meeting on the 14th. THAT SHOULD be the battleground IF Ben wants it to be. He knows who the next Prez is going to be so he could care less about "political" ramifications......HE IS the Chief. Do any of you remember Batinator. Bright guy. Do you recall how convinced he was of the complete collapse of liquidity in the summer of 2010 and then into late 2010? NEVER FIGHT THE FED! Even some of the brightest pundits trying to time this mess have been completely confounded by the market. It is amusing to listen now to the daily verbage on CNBC about the "fiscal cliff" or the "financial crisis". Over and OVER they repeat these phrases, while simultaneously saying invest in Starbucks or Tiffany or Chipotle or Whole Foods or Fraudbook. How can any CONfidence get restored in our financial system with a "Crisis" report at 7pm and an Options monster show an hour before. Its pure unadulterated insanity. Your money is "safe" however in this system so just relax sheeple.

38 comments:

  1. Sinclair is heading to Tanzania, and Ackerman is writing about the Bird Flu? Banking minions gathering in Jackson Hole sanctuary to try and convince the the masses to continuing papering into the tipping point. Heading off to scope out Geryl's African bunkers is a little unsettling, because there really is no place to run and fate has charted a course for each of us.

    The elections, Syria, and Iran are circus sideshows along with the broader paper markets.

    A bigger storm is steadily brewing in the background.

    Guess we will all know in 6-12 months if this is just another chicken little exercise or rats sensing the rising water levels.

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  2. Hello everyone,

    I've been preoccupied lately. We drive later today to take my first born to college. He is bouncing off the walls with excitement and I am happy for him. But, I will be sad too. Life goes on and a new chapter is beginning for my family.

    I'll try to check in later this weekend.

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    1. Doc, I sent my daughter to college 2 weeks ago...she is very happy..I'm also happy for her. I think I was more proud than sad as I reflected on my 18th year and compared it to hers...I was one wild child back then....I'm in Kona right now, got up to watch OZ and now nap time...

      STEM is interesting casino play for Tuesday..conference call and results...I jumped in at 1.96...looking for a run to the 360sma...half way there..

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  3. Draggi next week....PM rally to contiue. DNC and will Obama ever do anything to help housing? (non traditional policy measures?)

    FED punted to Obama.

    Congrats Doc.

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  4. BTW timline FIB is working well since 1426. Looks to be in the 8th FIB which should end on or near 9/6 at 1426ish again. If the move was to be lower then 1380 comes into view. Can't see how they close em lower today.

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  5. hehehhehee.......look at those babies move......

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  6. http://www.freestockcharts.com?emailChartID=7ac4fbd0-c689-4b54-978c-070c7c14f1a9

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  7. ya man making coin today. Bought a boatload of GPL yesterday.

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  8. most miners look like they are in the early stages of a 3 up.

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    1. it would fit.... but here is the bigger question a 3 of what....give me your best guess....i know mine

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  9. I would say in a macro sense 3 of 3 since 2005.

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  10. http://www.freestockcharts.com?emailChartID=77f4c1a3-b899-4adb-b71c-ce6da0e27b17

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  11. In 2008 I did not know what a trendline was....I have learned a lot from you, Daneric and others. It was an expensive learning curve.

    Thanks Kli.

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    1. 2008 taught even the most experienced traders humility

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  12. Man,those Krugs I picked up from Tulving last Friday have gotten alot heavier:) Glad I didn't buy any silver, I wouldn't be able to carry it out to the backyard today. JD

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  13. not usually an option player but GPL 2.50 OCT calls...should rock.

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  14. Congrats Doc! We have just started my family and I will definitely lose it when my son goes to college. That's still more than a decade away. But how knows if college will be worth it in 15 years. Anyway, great day to be holding miners and the shiny stuff. Good luck to all!

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  15. This is a huge breakout in gold from that descending triangle formation........just amazing they drug it out this point to break it out to the top.......watta game......they did the same with the EURO except they broke it to the downside.......also totally manipulated trade

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  16. Ole Jesse not talking too much about the "hedge" he put on yesterday. He posts some good stuff, but I've noticed over the past several years, he almost always reports his favorable decisions after the fact. jd.

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    1. i have been trading very small ammounts at this level for fear I would get caught watching the "big turn" and left in the dust like most retail....so I will continue to just hold and watch the big boyz play...wait til they get back from the Hamptons

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  17. Haven't confirmed it, but just read over at ZH that gold has just hit an all time high in euros - sure can't hurt the cause. jd.

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  18. http://stockcharts.com/h-sc/ui

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  19. CEF burning it up today - about time! I agree Guy, that's why I bought last Friday instead of waiting for today's reaction. But I saved enough for another buy today JIC:)jd.

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  20. What a GREAT DAY - now if we can just string another 9 or so like that together!

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    1. could have a great day at starbucks on a day like this.....your gonna have to make a road trip

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  21. they will not let the boyz load up easily when they get back from vacation......hmmmm....maybe they will wait for pullback to "jump on" the MOMO wagon.......but.....at what level will they slow this down.......I might try a small trade or two.....but not gonna give my shares to the "white shoe boyz" as my friend likes to say.....heheheeheh......

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    1. watch how the trade develops......could be VERY small down days with very hard up days.....or some scare the chit flushes that keep the volatility scared hedges

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  22. sounds familiar hehehe. http://news.goldseek.com/ClifDroke/1346434648.php

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  23. Most of the active mine projects will have outlined a geologic resource in their deposit. Even a relatively continuous deposit will have some variance in grade from one zone to another. Mother Nature does not distribute the metals evenly. So the mining companies will then evaluate the deposit economics by considering which units of a deposit can be extracted with a reasonable expectation to earn a profit. Within this calculation they will consider variance in metallurgy as well as grade. For example it is common to have copper, lead, and/or zinc along with the silver, and in some cases the combined base metals are worth more than the silver. A block model is commonly completed for an entire deposit using 10 - 30 foot cubes of rock, and calculating the average grade within those blocks, to come up with which parts of a geologic resource will be part of a mine plan, and which are of too little value to extract and process.

    In an underground mine, the lower grade zones that fall below the minimum cutoff are usually just bypassed in the mine plan, and left in situ. In an open pit, often these blocks must be extracted anyway because the slope stability requires that all rock within the cone of a pit design must be extracted, and it is done in sequence, with the sections closest to the surface to be removed first. Where there grade falls below cutoff, the material is blasted and extracted as waste rock to be dumped elsewhere, allowing the next phase of ore grade rock to be accessed.

    Now here is where things change. When you have a period of higher metals prices, some of that 'waste rock' suddenly becomes ore. Instead of shipping it to a waste dump, it goes to the mill. And if the mill is already operating at full capacity, the lower grade rock that is processed will generate lower silver output, and contribute to lower average grades reported for a mine during that time frame. This is happening right now at quite a few mines worldwide.

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  24. Investors tend to react to lower production by selling the stock. But this is the wrong approach. Because that material was formerly waste rock, it would not have created any value for the mine plan. Even with much lower grade feed, a mine is going to have stronger economics if it can be processed at a marginal profit. Why? Because instead of adding costs by blasting, extracting, and transporting the waste rock, it becomes a profit center that increases the total metals production for the mine, and contributes to the bottom line. The mineral inventory is extended as this lower grade material is included in the mine resource.

    People tend to put too much emphasis on the short term. Right now, $30 silver seems cheap because we have seen close to $50 highs in this bull market, and the correction has been grinding along for nearly a year and a half. And many producing miners are having trouble making money even with $30 silver. However, this level is much higher than the long term averages for silver. There are a lot of mines that were built using assumptions of $15-$18 silver, and therefore as the operators adjust this new higher price level into their block models, a lot of resource zones are being added to the ore blocks in their mine plan.

    I am not saying this will explain all of the variance in grades for all of the silver producers. But I am also saying that it is a fact, and it does account for some of that declining average grade as reported, and it is a GOOD thing. It means that in some cases, rock that would have been just an added cost is now contributing a slightly better profit. Why do I make a big deal out of this distinction? Because if silver continues moving higher, and I think it will go on to new highs well above $50, then we are going to see a lot more of this lower grade 'waste rock' that is suddenly going to the mill, for a lot of active projects. And I made this point before, but that applies also to gold, and base metals mines too. Either as a by-product, or as a primary metal, it does not matter. When prices rise for the metals, the mines will often have the option to run lower grade material and they will do so as a matter of economics, even if it means the overall production may decline in the short term.

    cheers!

    mike

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    1. the above two posts were from a poster over at turds.....apparently they are off suicide watch now

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  25. The answer to your question "re: who is turd" will be found here......


    http://www.tfmetalsreport.com/

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  26. opps!

    http://www.zerohedge.com/news/september-arrives-does-french-dexia-moment-france-nationalizes-its-second-largest-mortgage-lend

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