Sunday, August 25, 2013

POSERS OR TAKE OFF

Getting a boost?
Most retail investors are unable to stay in a market like the miners for a variety of reasons that should be clear to most of us but the pic above illustrates the real underlying reasons better than I can probably explain in words. The "market" is set up to separate you from profiting and it does so by creating a remarkably choppy ride with smaller waves that hit you constantly to confound you and then a remarkably large killer wave to destroy you. Demoralization, fear, and greed are all represented within the waves. Some of you that like to use Elliot Waves know this is one of the hallmarks that Elliot tried to capture in an attempt to predict the market movement. What Elliot could not control was that the "market" could always adjust the amplitude and time of waves at will if necessary. Time is the friend of he who has the most patience and patience is dependent sometimes on several factors not the least which is the size of your wallet. In fact, time is inversely proportional to the size of the wallet and the market always has the largest wallet so they use time to THEIR advantage. 

When one uses technical analysis, you have to recognize that it can work against you depending upon your own biases and emotion. A very savvy trader once told me that "Kli....you cannot be too greedy but there is also a time that you MUST be greedy".... That of course seems to be contradictory on the surface but further analysis of the "wave" theory provides some insight. For instance, in 2008 precious metals were destroyed in a massive down wave that crushed most traders other than the most stalwart participants. The knowledgeable traders know that oversold conditions in the extreme are to be bought or "added" to especially if they reach historic levels on the technical indicator such as RSI MACD etc. Of course Nature's law will be obeyed regarding for every action there is an opposite and equal reaction and this is where the sage advice of the trader saying there is a time where one MUST exercise greed. What that is saying is getting off of the ultimate rebound wave too early after the killer wave has passed will result in an enormous ride missed. Very few retail traders have this discipline. 

Many believe that waves reflect herd behavior......I disagree.....waves are used to create herd behavior....that is a huge difference and you can use this knowledge in your own investment themes. We've gone through a very long killer bear wave in PM miners and it may be over....only time will tell.....but a series of higher highs and lows are forming in the "waves".......so hang on but some small profit taking is never a "bad" thing....or even trading on the margin of your positions...on the other hand the words of the jackal always linger...."sometimes you have to be greedy" ....He said that is part of "Controlling your emotions too".......gl









51 comments:

  1. From Jesse's
    http://jessescrossroadscafe.blogspot.com/2013/08/moyers-americas-gilded-capital-and-end.html

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    1. thanks tom, i put it above in the post for you and others

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  2. http://theeconomiccollapseblog.com/archives/they-actually-expect-us-to-have-faith-in-these-financial-markets-after-this-week

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  3. We MUST have term limits...Nothing but contempt for the sheeple. We are Definitely NOT in the same boat, Evan. We'd like to tear it apart, but where to even start?

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  4. Sister, Here's some hope: “You can always count on Americans to do the right thing - after they've tried everything else.”

    If there's enough of the Americans that Churchill was speaking of, it's not over yet. Despite seeing the failure of elite political class driving their countries into the ground time and time again via socialism/collectivism (with a side of good old-fashioned thuggery), many of our leaders, and throngs of blind followers, still insist on following those lemmings over the cliff. Here's more hope though: even if this happens, take heart in how the Russians and Chinese finally got away from this and thus turned things around quite quickly. Just like the junkie, sometimes you have to hit rock bottom and feel max pain before there's any possibility of change. The downside: many junkies don't survive the ride.

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    1. I like to refer to your paragraph as the "lemming doctrine" and an element of truth provides support for this thesis...unfortunately there appears to be a more nefarious and more centrally controlled force driving the boom bust cycles that are regularly generated. This control center profits immensely of course but more importantly consolidates power and control with each cycle. Therein lies the diabolically, evil beauty.......a compartmentalized multi-centennial plan that provides multiple foils for the different (compartmentalized) parties to point fingers at, while maintaining virtual anonymity.....hehhehehehee......diabolically beautiful.... Of course this is all just a conspiracy.hehehehehhehhe

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    2. As far as China and Russia are concerned they will do as there told.....to a point. They're scared....make no mistake. Do you believe that Putin wants annihilation/global war? He knows the game and his mistresses are magnificent and are well worth living for, but he knows that he can only allow the control to go so far and if the line is crossed he knows he has to act....a classic Catch 22......but he also knows he is up against a force that may determined to push the process over the line.....

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    3. Please note I didn't address the more nefarious influences-on/goals-of the elite political class. That is to say.....we agree.

      With one possible exception: China. That sucker is so foreign to our thought process and has a 1000s of years of historic and current isolation from western influences, plus it is a jugernaut of still-to-be-determined size/power. My opinion is China is a more of a wildcard than you might surmise. Generally speaking, they don't behave in any way that would indicate what I suggest... yet. But if it becomes time for all the chips to go in the pot, make sure you have a pad on the floor for your jaw.

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  5. AG and MUX are above their 200 days now along with EXK knocking on its... Very nice.

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    1. I switched to in the money JAN calls last week. Glad I did, just have to be a bit more nimble.

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  6. WTG HUBZ. My friend with the slv calls very happy. Any attempt at changing the game seems to cause...well, you know.

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    1. Thanks sister... I almost went with SLV instead but honestly that and GLD scare me as I am afraid one day we'll wake up and those funds will be screwed due to not having as much gold/silver as they claim too. Maybe I'm wrong though but easy to ride along with the miners for the most part.

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    2. Also remember with options especially further out the spreads can make life difficult. Even now my MUX $2.50 calls are trading at an ask of 70 cents but a bid of 55. That's a rough spread!

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  7. They must be pinning for opex. Can't believe Oil is not up with all this Syria news. Markets aren't manipulated one bit you guys are just paranoid ;)

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  8. Haha yes, but did you see those durable goods and business spending numbers? Oil should be $75/bbl. Besides, Syria has very little oil and gas.

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    1. Syria has the potential to blow up the ME and taking oil up with it ....this is the goal..complete chaos...Syria is to be Balkanized in three pieces and then Iran will follow if the ME isn't green glass before....the real goal is green glass

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    2. Kli,

      Do you have a reference for your post. "Syria to be Balkanized in three pieces and then Iran..."

      What 3 pieces?? Just speculation??

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  9. setting up for some massive short squeezes on miners an PMs this week....and with traders gone it could be bloody......on the other hand they just may be "setting up" some weak longs for a nice pullback buying opportunity for anyone that has a little cash put back...:-)

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    1. just pushed gold over 1400 as I typed.......trap set...but for whom

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  10. Hopefully not for my greedy ass :)

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  11. Yeah a nice run up at the end there in PMs. I'm personally waiting for a pull back though, hopefully we get it...I think we do in the next week or so.

    What do you think chaos in the M.E. would lead to? World War? Then allow the collapse to take place and blame it on that?

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    1. not only blame it on that but reposition and profit from the process....the full wash,rinse and repeat cycle with a major population reset with a world wide global nuclear war exchange

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    2. You think it goes nuclear Kli? If so, what are the odds we could get hit?

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  12. I'm very grateful to Kli for this blog. As he stated over and over they will likely not allow people on the ride up. That seems to be playing out pretty well right now. No pullbacks really so far. Should it pullback? Yes... but will it? The Dow Jones sure as hell didn't for the past 4 years. There's a gap on some miners that is bugging me a bit but it's looking less and less likely to be filled. Some miners do not have the gap.

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    1. thnx.....note that there are a number of miners already up 100% or close to it in less than 2 months....look at GPL SSRI AXU.....not only are they already doubles but they can easily run much higher from here.......that is why the slaughter was so effective to prevent anyone from jumping on the trade......and it may pull back hard soon and you MAY buy it on the BOTTOM of the pullback.....I say GL to you on that.

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    2. BTW gold is at 1404 as I type and I here virtually nothing on the CNBS crowd on it.....that is good

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    3. also SVM AND SVLC are doubles off their bottoms a few weeks ago.....100%...not bad if someone could have bot when EVERYONE said that gold was going sub 1000....of course it may yet BUT 100% return in a few weeks would have been nice on those big tail capitulation days.....

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  13. ...the baby miners have a noce move from when there was bloody streets in the metals. Remember, some where calling for gold below $1100...

    Thinking of waves. Do ya think we are in a wave 3 of QE? or better yet 30 years of credit fueled economic expansion?

    I cannot fathom any way the FED or central banks can re-inflate yesterdays economy and therefore they are posers or imposters. Worse, how can we take back 30 years of enonomic demolition through NFTA and globalization? We can't. Then the housing "recovery" is a poser recvery as well.

    I have been trying to see how we can have a broad based twitter eonomy or facebook based on the best place to get a pizza.

    We are doomed. We have been doomed as we lived some Greenspan pipe dream...

    Ya just cannot borrow your way to prosperity ever....posers.

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    1. as you know sheeps this is an engineered collapse of a developed economy and the petrodollar that is the lynch pin that supports the ponzi......and yes it will collapse but intentionally....so you need to ask the question, what is on the other side? ie. what will they move into in terms of geo/global positioning. What industrial/energy centers will benefit? what developing economies will be selected by the elite? gold and silver are only a means to survive the washout.....the other side is the next stage...IF you survive the washout

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  14. I guess te first question is; Do you want to survive the wipeout?

    I grew up in Orange County when in fact there was more ornage trees than people. Most did not like the coast cause it was not good for farming or cattle.

    I enjoyued open the open uncrowed beach even before Dan Point Harbor.

    Do I want to survive the wipeout?

    AS a person against the ocean I have survived 'cause she let me..even as my stupidity screamed for a Darwinian end.

    But what of the economy? does Darwinian theory end at the hand of the elite? Does survival belong to the richest?

    If I had more brothers perhaps I could fight. We are after all alone in this fight. The ballot is a lost cause.

    Whom do we fight? Yes yes, I know...the litle things..do not spend money where tey have the pension posse hanging out all the time. In fact do not spend money period.

    Too many spend money look at all the new cars...Cars they will regret I am sure.

    I withdraw more and more. I KNOW the future is not Bright. THIS I am sure of.

    America had greatness in it's hands and it was sold to the highest or lowest bidder.

    Too bad really. But, I did not die of the plague, Vietnam, Iraq, spent 5 years on the beach and generally had a good time.

    Now, I take care of my own and bow out.

    Not sure I can survive the wipeout that is to come. Have had a hard time hanging on to what I already have had....

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  15. Ugh I hate gaps... I'd sell my calls but the spreads are still too nasty :( Think we pull back soon. Hopefully I'm wrong.

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    1. Sold EXK and AG calls. Holding my MUX ones due to the rotten spread, plus gives me upside exposure and I've reduced my downside greatly.

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    2. Scratch that somebody actually hit my ask on MUX... Sweet! I'm all cash.

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    3. around here looks tough

      http://s2.postimg.org/6np48cgc9/Gold_827.jpg

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    4. Nice chart thanks! Makes me feel better about my decision heh.

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    5. it could head back to bottom channel and then get really juicy for rip north..

      good trading..

      Hope everyone here is in good health and spirits..

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  16. nice trading Hubz....took a tiny off the table in GPL and AXU .... a little cash for pullback here

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    1. Thanks Kli. May switch to just straight stock for the next pop up. Honestly only made about 10% more than I would've with just straight stock. Options just didn't move as well... so that extra 10% is not worth the risk.

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  17. AXU a monster! Don't own but may buy on pullback. MSM trying to walk the war back while ships and subs line up...:(

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    1. Wow just pulled up a chart myself. What a move!!! Especially today.

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  18. Call me crazy but bought 20 SLV $23 weekly puts for 12 cents *just* in case they smack this down.

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    1. You crazy.

      My gut tells me they will continue to walk PMs up with no pullbacks until a Syrian conflict begins and then they'll slam it down. A page from the buy the rumor, sell the news playbook. I would normally think that the govt wouldn't telegraph an attack but they pretty much painted themselves into a corner by announcing Syria's "use" of chemical weapons and the plans to attack. It's all theater but perhaps the talk is to manipulate public opinion. Thus, I can see them using the Sunday morning TV news/talk shows to try to solidify public perception and begin the assault soon after.

      Being long at the start of any conflict feels like the right move but I can see the opposite happening.

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    2. Probably am but just hoping to make a little bit of beer money :)

      They really smashed AG today... I'd love to pick it up in the mid to low 14s for another ride. As would others.

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  19. Guess we'll see if miners are leading the metals or if it's the other way around.

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  20. Our "assets" are in place per Hagel. Grrrr.

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  21. Big reversal candles forming on miners today....should get some nice pullback

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    1. RSI's were getting ridiculous on many miners. Glad to see this action it's very healthy.

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  22. Yes, the ONLY thing I have holding up is PPP...SLW getting slaughtered. Oil price isn't helping.

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  23. Any pullback in gold (early Sept) should be relatively minor. http://www.swingcycles.blogspot.com/2013/08/aug-24-2013-gold-cycles.html

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    1. I like it... I would prefet to start playing again in the 1340-1350 range.

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