Monday, January 31, 2011
DIA & QQQQ, one above, one below the EMA 20
If they both get below, it could be time to re-do the bearish thing. But I don't trust these alarming geopolitical events not to end up being bull fuel.
Admin Notes
General Admin: Biiwii.com will be down for a day or two (hopefully no longer) as it migrates to a new host server.
Market Admin: It was noted in NFTRH121 that I "smell a rat" with last week's downside owing to the strife in Egypt. That downside allowed me to get back to positive on some bear positions and minimize downside on others. I am not going to risk the possibility that over bullish sentiment was reset enough to give the bulls another push higher.
I will now be actively bearish nothing, but ready to be so if given the chance going forward. Otherwise, the plan is to manage risk with significant cash levels.
Market Admin: It was noted in NFTRH121 that I "smell a rat" with last week's downside owing to the strife in Egypt. That downside allowed me to get back to positive on some bear positions and minimize downside on others. I am not going to risk the possibility that over bullish sentiment was reset enough to give the bulls another push higher.
I will now be actively bearish nothing, but ready to be so if given the chance going forward. Otherwise, the plan is to manage risk with significant cash levels.
Gold This Morning: Peace in Our Time --Jon
Heavy overnight trade robustly reached Friday's highs early and then literally detumefied dropping about 20 bucks. The Friday rally was well-advertised as a flight for safety on the media, maybe memories of Madame Benali in Tunisia crab stepping across the tarmac dragging recycled Whole Food bags full of gold provoked CNBC. This morning we are back to dealing with facts. The COT numbers on Friday continued the trend of the past four weeks with specs lightening up and commercials buying. The GSR is relatively unchanged ~47.90 and open interest as of last Thursday is ~488,000 contracts; RSI remains under 40. These are the facts, deal with them and when you see the guy coming off the plane waving a piece of paper remember that Churchill remarked that Britain had just suffered its worst military defeat without a shot being fired. http://www.biiwii.blogspot.com
Sunday, January 30, 2011
NFTRH121 Out Now
Am I coming unglued and coming up with delusional fantasies? Well no, not where the deadly serious business of financial markets is concerned. Fact is, it is not me improving my writing or manufacturing better ideas. It is the markets, each week providing new indications and promises for indications to be.
The first half of 2011 is going to provide some real answers which, if managed properly, will separate the winners from the losers... again.
As for the here and now, the Speculation portfolio continues to plod along at a risk-managed -5% for 2011, and +139% from baseline (at NFTRH1).
Have a great Sunday.
Friday, January 28, 2011
Gold & Silver CoTs hot off the presses
And a quick look tells me I may wish to undo the ZSL hedge trade and concentrate on other areas. Gold? Yup, the usual herds are aligning to play their usual roles. http://www.biiwii.blogspot.com
GOLD - COMMODITY EXCHANGE INC. Code-088691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/25/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 100 TROY OUNCES) OPEN INTEREST: 735,631
COMMITMENTS
234,717 58,889 165,344 258,399 474,879 658,461 699,112 77,170 36,519
CHANGES FROM 01/18/11 (CHANGE IN OPEN INTEREST: -66,302)
-9,337 4,269 -47,091 -9,327 -26,466 -65,755 -69,288 -546 2,986
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
31.9 8.0 22.5 35.1 64.6 89.5 95.0 10.5 5.0
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 396)
221 94 166 62 58 339 269SILVER - COMMODITY EXCHANGE INC. Code-084691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/25/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 5,000 TROY OUNCES) OPEN INTEREST: 174,347
COMMITMENTS
39,090 8,393 61,800 39,053 85,610 139,943 155,803 34,404 18,545
CHANGES FROM 01/18/11 (CHANGE IN OPEN INTEREST: -8,860)
-952 368 -8,283 -798 -2,642 -10,032 -10,557 1,173 1,697
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
22.4 4.8 35.4 22.4 49.1 80.3 89.4 19.7 10.6
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 200)
96 54 72 38 40 167 135
Interview w/ Jim Rickards @ King World News
Well spoken, no tin foil and well worth a listen. http://www.biiwii.com/analysis.htm
VIX: Close but no cigar
We have global tensions and even some pretty nasty looking action in many emerging markets. But as yet, here in the slumbering USA where we celebrate growth and economic victory, the VIX remains contained for now. MACD looks okay and VIX bounced from support but still, it is hard to trust those greedy bulls to do the right thing and just start selling. ;-) VIX is not broken out til it's broken out and so neither has real, market moving volatility. http://www.biiwii.blogspot.com
Les Paul Studio 60's Tribute
...and at a retail of $849, the price is right. I totally don't need this guitar as I have a Lester and I have P-90 pickups in a screwed up (in a good way) Tele. But I am tempted to go get this on order. Maybe after I sell another one first. Lot's of nice color options, but I think I'll go GOLD. http://www.biiwii.blogspot.com
SCO
And since I am becoming hype-o-phobic, I guess I will try to short oil as well, and see how it works out. Said the blogger with the renowned record of futility from the bear side. http://www.biiwii.com
ZSL
Back in ZSL again. I think I will leave put options alone going forward and stick to ZSL and straight short SLV as protection for gold positions. Anyone with experience knows that spikes in gold overwhelmingly often do not hold on fear impulses.
Why would they? After all, it is a simple hunk of pretty metal used as a monetary surrogate during times of official paper money bastardization. It is nothing that should be associated with fear. Quite the opposite. The word value comes to mind. http://www.biiwii.blogspot.com
Why would they? After all, it is a simple hunk of pretty metal used as a monetary surrogate during times of official paper money bastardization. It is nothing that should be associated with fear. Quite the opposite. The word value comes to mind. http://www.biiwii.blogspot.com
Wow...
I was away from the computer since HUI was up around 2.50. Holy $#!$ !!!!!
Rarely is a day finer than when your PM positions are up big and the things you are short are getting clobbered. Like I said, wow. http://www.biiwii.blogspot.com
Edit (12:12) But if this is Egypt related, then this is a good short covering opportunity on stocks and possibly selling/hedging op in PMs... IF, that is what is happening.
Rarely is a day finer than when your PM positions are up big and the things you are short are getting clobbered. Like I said, wow. http://www.biiwii.blogspot.com
Edit (12:12) But if this is Egypt related, then this is a good short covering opportunity on stocks and possibly selling/hedging op in PMs... IF, that is what is happening.
Silver
Latest hedge gone (not mentioned on blog, but in email update). I think silver can turn down again after a bounce completes and SLV fills the gap, however.
Or not... in which case I will be thrilled as the last few days provided some opportunity to increase quality gold stock positions. http://www.biiwii.blogspot.com
Or not... in which case I will be thrilled as the last few days provided some opportunity to increase quality gold stock positions. http://www.biiwii.blogspot.com
Just another post on Gold
The signs come in fast and furious now. The gold analyst talking in December about a February upside explosion to above 2000/oz., now talks about money being made on the short side for at least the next 6 months. Large speculators have been reeled in significantly on the CoT, the public opinion of gold - sorry, I pay for this service and cannot reproduce the data here for free - is good to go, and then there are the technical downside targets, which NFTRH has had loaded for weeks now, coming into view.
Trend followers are doing what they always do and for some reason, when people read things on the internet with titles like 'Gold Loses Critical Support', they get their pants all bunched up. A topping pattern appeared in gold back in December. From this pattern, there were several downside potentials, none of which - including the remote prospect of a test of the massive support at 1000 - should be causing heartburn right now.
In the precious metals sector, you operate on a risk vs. reward basis, strap in for volatility and as I have long said, let FEAR RIDE SHOTGUN. Embrace it. Don't be a sissy, as Jonathan would say. This is the only way to make long term gains and out perform the herd. Be brave when they are sucking their thumbs.
You have no idea how often I am negatively reinforced, like when the intelligent deflationist took a well spoken exception to my bullish stance on oil in early 2009. When I was told by a financial professional and former subscriber, why treasury bond yields were going down and my 'rates rising' stance was incorrect in Q4 of 2010. And now with gold, we have the ultimate contrarian opportunity in the asset that is contrary the vast, inflated mess of global assets.
Year after year it's the same market, same players, same dynamics, same herd. The wash, rinse, repeat cycle whirring away. Winners and loser to be sorted out soon enough... again. http://www.biiwii.blogspot.com
Trend followers are doing what they always do and for some reason, when people read things on the internet with titles like 'Gold Loses Critical Support', they get their pants all bunched up. A topping pattern appeared in gold back in December. From this pattern, there were several downside potentials, none of which - including the remote prospect of a test of the massive support at 1000 - should be causing heartburn right now.
In the precious metals sector, you operate on a risk vs. reward basis, strap in for volatility and as I have long said, let FEAR RIDE SHOTGUN. Embrace it. Don't be a sissy, as Jonathan would say. This is the only way to make long term gains and out perform the herd. Be brave when they are sucking their thumbs.
You have no idea how often I am negatively reinforced, like when the intelligent deflationist took a well spoken exception to my bullish stance on oil in early 2009. When I was told by a financial professional and former subscriber, why treasury bond yields were going down and my 'rates rising' stance was incorrect in Q4 of 2010. And now with gold, we have the ultimate contrarian opportunity in the asset that is contrary the vast, inflated mess of global assets.
Year after year it's the same market, same players, same dynamics, same herd. The wash, rinse, repeat cycle whirring away. Winners and loser to be sorted out soon enough... again. http://www.biiwii.blogspot.com
Gold This Morning: Strong Message to Follow --Jon
Heavy overnight trade within a $9 buck range (basis April now, of course) vacillating intermittently between selling and buying forays that to some might look weary and tiring but to a trader (and long-term holder) this sclerotic coda is easily diagnosed as a distribution phase in its final throes. I am particularly comfortable with my prognosis since gold open interest sharply fell ~15,000 contracts Wednesday to a total of 491,222, a level we haven't seen since latish 2009. If in fact we are close to a stasis of short-sellers and sissies and I remind you that commercials have indeed been net buyers for 3 weeks then you certainly should not be sellers here. The rest of the facts: GSR slightly elevated at ~49.10 and RSI now under 30 which puts it in the bungee cord category. April options with ~60 days to expiration offer cheap entry at ~16.5 volatility and as I occasionally remind you these are to be hedged only unless you are keen to bet with the few people still standing who claim in the back pages of Soldiers of Fortune magazine that great wealth can be made with naked commodity options. Have a good weekend. http://www.biiwii.blogspot.com
Thursday, January 27, 2011
Gold
My newsletter was a bit of a nervous Nelly about gold and gold stocks (while maintaining a pure big picture bullish stance) not too long ago. Now, while not putting myself out of business by getting too detailed, the dynamics are in place whereby it is appropriate to become more bullish the lower the metal goes.
Blog readers know some of them already, of course. Like the CoT. The actual public sentiment structure is another, and gold's probable support and retrace levels are another. As for fundamentals well, do you believe economic growth is organic and sustainable? Ha ha ha.
Look at the cliff jump gold is taking as I write. It's beautiful. But it's not yet to target. http://www.biiwii.blogspot.com
B...ig D...ump I...ndex
A couple headline commodities (Copper & oil) are taking a cue from the precious metals and looking toppy. But global trade is by all accounts brisk and companies are shipping product.
Does this index tend to anticipate well? Is it simply working off capacity overhang? Anybody know? I know most have not signed up for Disqus (I require registration) but you can comment or pop me an email. http://www.biiwii.blogspot.com
Silver proxy SLV - Keys to the Kingdom?
I am going to take a not so wild ass guess and say that the bull rally will endure approximately as long as it takes silver to fill the upside gap at around the SMA 50. http://www.biiwii.blogspot.com
Gold This Morning: Been Down So Long it Feels Like Up --Jon
Heavy trading volume overnight in both FEB and APRIL contracts as the electronic network demonstrates its efficiency in weather disabled New York. Last night we had a brief moment of justifiable impulse buying which when it failed several bucks short of $1350 immediately brought in sellers. The facts: GSR is slightly easier ~48.70, RSI ~34.80, and open interest rose ~7,000 contracts. For those still faint or struggling with narcolepsy after Tuesday's Kumbaya love-in, our Fed yesterday, after 2 days of meetings, concluded that 'we sail on o ship of state' apologies to Longfellow for diminishing the title for his lyrical paean to America to a cheap play on QE2. Today: I am at a loss for words to further describe this continuing discounting of the obvious in gold and shall fall back on the words of a great trader..."The worse a situation becomes, the less it takes to turn it around, the bigger the upside." Yes, extra credit for identifying the source. http://www.biiwii.blogspot.com
Wednesday, January 26, 2011
Official Fed Line... and not so official one
Official: "...and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate."
Not so official: "...and if at any time inflation does not appear to be in line with its mandate the committee will pull out its biggest and best tool of all and smash the hell out of gold and silver to ensure that the people believe the committee when its says inflation is at a well and good level of containment."
Not so official: "...and if at any time inflation does not appear to be in line with its mandate the committee will pull out its biggest and best tool of all and smash the hell out of gold and silver to ensure that the people believe the committee when its says inflation is at a well and good level of containment."
Memo from the real economy...
First of all, I am happy to have returned with a really neat supplier award and even more happy to have interacted with several executives of a large US based, multi-national manufacturing corporation, Parker Hannifin. Unlike many large corporations, this one gets it, where productivity and global focus are concerned. I am very impressed.
My company, of which I have to admit I am a virtual part-time employee, deals only with a tiny segment of Parker, in medical equipment and instrumentation. But talking with a supply chain management exec out of Cleveland, it appears the entire company - much of it industrial related - is ramping.
The focus of the event today was one of thanks and positive tone toward suppliers. Quite the opposite of the one I endured during a deflationary period in 2002, when I felt lucky to get out alive. The focus is on quality, automation, productivity and BETTER IDEAS, all of which I can relate to. It is also not the presentation of a company expecting economic downturn.
It still says here that the broad markets need a significant correction, but as NFTRH has been stating lately, it is best to reserve judgment on its nature until such time as it actually gets here. Greenspan's funny policy did after all extend an inflation and hope fueled bull market for nearly 5 years. Much more detail involved, but you get the picture. We review velocity of money and other factors and we see that the economy is ramping to the inflators' will. Moral hazards are high, but outside of normal correction, one wonders how long it may take for them to be expressed this time. http://www.biiwii.blogspot.com
Edit (2:52) Adding monthly chart of PH. I am no momentum guy, but does this look bearish to you as an indicator of the global economy? Separately, there was much talk of China, India and the emerging world. It is real.
FOMC
Press Release
Release Date: January 26, 2011
For immediate release
Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward.Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Gold [well after] This Morning: State of Confusion -Jon
In spite of the extraordinary drop in open interest yesterday overnight volume is surprisingly meagre even if one adds in activity in the April contract. Let's go to the gold open interest story. It fell from 580,750 contracts at the close last Friday to 498,998 at the close Monday, 14.1%. I have never seen a daily change remotely close to this magnitude. We shall certainly see in the next COT report whether the change was driven by specs or commercials but suffice to say that either there was massive short covering within Monday's volume or significant liquidation. A rumor from the pit was a that a certain large prop trader was 'carried out'...visions of a Viking burial. The facts remain unchanged and supportive, GSR essentially unchanged at ~49.3 and RSI remains at a trampoline like level ~34.60. Throw into the mix the open interest drop, the ultimate stamp of moldy sentiment and we have all the basic ingredients if only someone could send the invitations to the party. Speaking of parties, last night's adults only version of Romper Room seemed very warm and fuzzy which will probably continue to keep our audience sedated. Next year let's see if we can hire a better magician, the slight of hand was obvious. http://www.biiwii.blogspot.com
It does't get any better than this!
Yey Obama! Yey stocks! Rah rah rah America! Dow 12,000! Cramer's bullish!
I did not hear the SOU because I was out jamming (and receiving a valuable lesson on getting my tinny voice to sing on pitch - we are all learning, all the time) last night. But it looks like the POTUS made a hit on a downright feel good night.
Unless they truly have repealed all the classic topping indicators, we should top out soon. A top does not mean Armageddon, but I will guess we are within 2-3 weeks of one of some kind; a healthy one or otherwise.
If not, I will need to eliminate bear positions and await a top that would fail one day into something much worse than a healthy correction. Funny thing about these LCPDs (last chance power drives), they are fueled by desperation (of policy makers) in the early stages and raw, stupid and really disgusting momentum in the latter stages. But when they end...
Posting may be light today as I have to go be a business man and do business man things for much of the day. http://www.biiwii.blogspot.com
I did not hear the SOU because I was out jamming (and receiving a valuable lesson on getting my tinny voice to sing on pitch - we are all learning, all the time) last night. But it looks like the POTUS made a hit on a downright feel good night.
Unless they truly have repealed all the classic topping indicators, we should top out soon. A top does not mean Armageddon, but I will guess we are within 2-3 weeks of one of some kind; a healthy one or otherwise.
If not, I will need to eliminate bear positions and await a top that would fail one day into something much worse than a healthy correction. Funny thing about these LCPDs (last chance power drives), they are fueled by desperation (of policy makers) in the early stages and raw, stupid and really disgusting momentum in the latter stages. But when they end...
Posting may be light today as I have to go be a business man and do business man things for much of the day. http://www.biiwii.blogspot.com
Tuesday, January 25, 2011
FOMC, T minus 1...
Well, this sure is a nice quaint little scenario isn't it? T Bonds rise here on Fed day (I am still long IEI), and the precious metals continue a vicious smash down. Isn't it convenient that gold and silver got hit in a sustained manner just as policy makers plan to tell us about coming inflationary policy?
They looked a little silly telling us that inflation was contained with Au over 1400, Si over 30 and copper in blue sky. Now they will not look so silly when they put the inflation boilerplate in tomorrow's message. They will be silly though, or more accurately people who follow the breadcrumbs will be set up to look pretty silly. http://www.biiwii.blogspot.com
They looked a little silly telling us that inflation was contained with Au over 1400, Si over 30 and copper in blue sky. Now they will not look so silly when they put the inflation boilerplate in tomorrow's message. They will be silly though, or more accurately people who follow the breadcrumbs will be set up to look pretty silly. http://www.biiwii.blogspot.com
USD proxy UUP & GDX correlation
Say, what does it mean that the miners and Uncle Buck have been going in the same general directions lately. Hmmmm.... http://www.biiwii.blogspot.com
All silver bear positions unwound...
SLV puts, SLV outright short (twice) and now ZSL (twice), all unwound after helping cushion some of the gold stock fall. SLV has lower to go, but the risk vs. reward looks better to be short elsewhere. Though a bounce in silver could bring about another short opportunity. There remains a good chance that SLV 24 / Silver 25 +/- is in the cards. It is obvious to anyone who has watched me publicly botch silver from a bearish perspective as often as benefit from it, that this is not a chest thumping post. http://www.biiwii.blogspot.com
Parsing the MSM
Let's go through the Bloomberg article step by step:
The Federal Reserve will probably push forward with $600 billion in securities purchases even as the biggest jump in business loans in more than two years adds to signs the U.S. economy is gaining strength. Commercial and industrial loans increased at an annual rate of 7.6 percent last month, the largest gain since October 2008, according to Fed data. Total bank credit has risen in three of the past six months as business loans cushioned against declines in real estate and consumer credit.
Fed Chairman Ben S. Bernanke and his fellow policy makers will probably note improvements in the economy such as higher consumer spending in a statement to be released tomorrow, former Fed governor Lyle Gramley said. Encouraging signs like firmer bank credit are unlikely to prompt a reduction in stimulus so long as growth remains weak and unemployment persists near 10 percent, he said. “The Fed is not ready to let up on its accelerator,” said Gramley, senior economic adviser for Potomac Research Group in Washington. “They are going to be impressed with the fact the economy has gained some momentum, but there are still strong headwinds to growth, and bank lending is quite modest.”
Policy makers will probably affirm their plan to buy Treasury securities through June to reduce long-term yields and spur lending, said Mark Gertler, a New York University professor and research co-author with Bernanke.
Since reducing its target federal funds rate to near zero in December 2008, the central bank has used its balance sheet as a monetary policy tool. Its assets have tripled to $2.43 trillion from $873 billion in February 2008.
Since reducing its target FF rate to near 0, the CB has used its balance sheet as the curtain behind which the Wizard pulls the levers. Where is all this stuff going to go? Is the Fed going to blow itself up in a final blaze of glory or is this crap going to be returned to the people as hyper inflated remnants?
The committee may continue to describe credit as “tight” while acknowledging a pickup in growth in the fourth quarter to the fastest pace in three quarters, Gramley said.
Oh no, they may have to grudgingly 'acknowledge' growth. It gets harder and hard to keep 'inflate or die' going the rosier things get. Say Ben, why not have a little confidence in the recovery and let 'er run on her own for a while?
Bernanke probably won’t be in a hurry to withdraw stimulus with joblessness persisting at 9.4 percent and inflation low, Gertler said. The Fed will probably affirm its pledge to keep interest rates low for an “extended period.” “This is likely to be a stay-the-course meeting,” Gertler said.
When weighing the timing for a withdrawal of stimulus, the Fed will look for a sustained rise in credit such as business loans, said Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. This would signal banks are deploying record reserves, potentially rekindling inflation, he said. “That is going to be a tipoff that the Fed has to start an exit strategy” from its stimulus, said Kasriel, a former research economist at the Chicago Fed. “We are not there yet.” Treasury yields have risen amid signs of a stronger economy. The yield on the 10-year note increased to 3.35 percent at 8:46 a.m. today in New York from 2.57 percent after the Nov. 3 FOMC meeting, when the asset purchases were announced. Yields have increased because of “a stronger economy and better expectations,” Bernanke said at a forum in Arlington, Virginia on Jan. 13.
Jim Comiskey, a senior market strategist at Lind-Waldock in Chicago, disputed that view, saying yields have risen on concern that Fed bond purchases will stoke inflation. “The market is scared about the inflationary impact of what the Fed is currently doing,” Comiskey said.
The article drones on, but we'll end with the right minded Jim Comiskey (any relation to the ballpark?) and realize that the MSM does occasionally allow rational voices with no obvious agenda to come forth. http://www.biiwii.blogspot.com
The Federal Reserve will probably push forward with $600 billion in securities purchases even as the biggest jump in business loans in more than two years adds to signs the U.S. economy is gaining strength. Commercial and industrial loans increased at an annual rate of 7.6 percent last month, the largest gain since October 2008, according to Fed data. Total bank credit has risen in three of the past six months as business loans cushioned against declines in real estate and consumer credit.
If you think there is a global inflation problem, wait til you see the problems incurred by anyone who gets in the way of the mother of all inflations the US is in danger of stimulating.
Fed Chairman Ben S. Bernanke and his fellow policy makers will probably note improvements in the economy such as higher consumer spending in a statement to be released tomorrow, former Fed governor Lyle Gramley said. Encouraging signs like firmer bank credit are unlikely to prompt a reduction in stimulus so long as growth remains weak and unemployment persists near 10 percent, he said. “The Fed is not ready to let up on its accelerator,” said Gramley, senior economic adviser for Potomac Research Group in Washington. “They are going to be impressed with the fact the economy has gained some momentum, but there are still strong headwinds to growth, and bank lending is quite modest.”
And the MSM still promote the fantasy that the rest of the world has the inflation problem as the US uses phony implied confidence in its treasury to do as it pleases in the short term.
Policy makers will probably affirm their plan to buy Treasury securities through June to reduce long-term yields and spur lending, said Mark Gertler, a New York University professor and research co-author with Bernanke.
Let's no forget the role of prominent academics in spinning this tale to even curiouser and curiouser levels.
Since reducing its target federal funds rate to near zero in December 2008, the central bank has used its balance sheet as a monetary policy tool. Its assets have tripled to $2.43 trillion from $873 billion in February 2008.
Since reducing its target FF rate to near 0, the CB has used its balance sheet as the curtain behind which the Wizard pulls the levers. Where is all this stuff going to go? Is the Fed going to blow itself up in a final blaze of glory or is this crap going to be returned to the people as hyper inflated remnants?
The committee may continue to describe credit as “tight” while acknowledging a pickup in growth in the fourth quarter to the fastest pace in three quarters, Gramley said.
Oh no, they may have to grudgingly 'acknowledge' growth. It gets harder and hard to keep 'inflate or die' going the rosier things get. Say Ben, why not have a little confidence in the recovery and let 'er run on her own for a while?
Bernanke probably won’t be in a hurry to withdraw stimulus with joblessness persisting at 9.4 percent and inflation low, Gertler said. The Fed will probably affirm its pledge to keep interest rates low for an “extended period.” “This is likely to be a stay-the-course meeting,” Gertler said.
Don't worry Mr. Gertler, jobs always follow velocity of money. Why is everybody so dour? Come on people, have some CONfidence.
When weighing the timing for a withdrawal of stimulus, the Fed will look for a sustained rise in credit such as business loans, said Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. This would signal banks are deploying record reserves, potentially rekindling inflation, he said. “That is going to be a tipoff that the Fed has to start an exit strategy” from its stimulus, said Kasriel, a former research economist at the Chicago Fed. “We are not there yet.” Treasury yields have risen amid signs of a stronger economy. The yield on the 10-year note increased to 3.35 percent at 8:46 a.m. today in New York from 2.57 percent after the Nov. 3 FOMC meeting, when the asset purchases were announced. Yields have increased because of “a stronger economy and better expectations,” Bernanke said at a forum in Arlington, Virginia on Jan. 13.
Hey Paul, how did your usually reasonable voice get in this puff piece? Anyway Paul, go take a look at the 'Gently Bottoming' Business Loans graph in the previous post. We are getting there.
Jim Comiskey, a senior market strategist at Lind-Waldock in Chicago, disputed that view, saying yields have risen on concern that Fed bond purchases will stoke inflation. “The market is scared about the inflationary impact of what the Fed is currently doing,” Comiskey said.
The article drones on, but we'll end with the right minded Jim Comiskey (any relation to the ballpark?) and realize that the MSM does occasionally allow rational voices with no obvious agenda to come forth. http://www.biiwii.blogspot.com
Fed Likely to Press on w/ QE Even as Business Lending Rises - Bloomberg
You see, here in the US we are promoting a fairy story that says the inflation we are generating 24/7 will not one day manifest itself in out of control rising prices. That is because we are promoting the fairy story that rising prices is inflation.
Rapidly rising prices in the emerging world are the cause for great concern, driving some investors out of the inflationary frying pan (China, emerging resources based economies) and into the fire (the US and to a degree, Europe, the developed economies with relatively less intense infla... I mean, price increases). Get this; inflation is not rising prices. That is a consequence of the inflation promoted by a Federal Reserve that continues to monetize the bloated, legacy debt even though we supposedly have economic recovery taking hold.
Fed Likely to Press on with QE Even as Business Lending Rises
The longer that gold remains under pressure from 'da goonz', the better the opportunity. Meanwhile, here is an updated graph, compliments of the St. Louis Fed, which was shown in NFTRH several weeks ago and excerpted here on the blog: Bank Loans Gently Bottoming?
The message was among other things, do not be a deflationist in this environment. This is why asset markets are rising; when money gets really scared (as the EFFECTS of inflation become more widely known) and becomes aware of the extent of inflation, we may indeed have a boom. But it may end up being von Mises' Crack Up Boom.
The signal in the gold-silver ratio would argue against this scenario, however temporarily. But gentle Ben is working not to let the GSR signal get out of control. The question remains, do you believe this great purveyor of 'inflation as economic driver' can control the markets indefinitely?
Anyway, here is the updated Bank Loans graph courtesy of St. Louis Fed. This still looks like a bottom I would buy, which means that the deflationist's 'velocity of money' argument could be about to go out the window, possibly along with my personal 'gold stocks above all others' stance, which requires an impulse toward economic contraction. I think the miners would do fine in the early stages of an inflationary economic recovery, especially considering the much needed sector correction that persists to this day (with some associated and compelling technical data points).
If - and in my opinion it's still a really big if - things stand on their current course, the US is setting up to stand alone as the nation that once again shows 'em how its done when promoting inflation. Down the line, the US will be forced to fight inflation the same way the global stewards of non-reserve currencies are forced to do now. Inflation is happening 24/7, gold is conveniently getting smashed and this is a war, not a battle.
Gold is fine, and if Ben gets his way, silver could yet be even finer, from a momentum perspective. But right now, as silver declines vs. gold, there is a negative divergence to inflationary aspirations.
Thus ends a rambling, somewhat jumbled post by blogger who is out of time. http://www.biiwii.blogspot.com
Rapidly rising prices in the emerging world are the cause for great concern, driving some investors out of the inflationary frying pan (China, emerging resources based economies) and into the fire (the US and to a degree, Europe, the developed economies with relatively less intense infla... I mean, price increases). Get this; inflation is not rising prices. That is a consequence of the inflation promoted by a Federal Reserve that continues to monetize the bloated, legacy debt even though we supposedly have economic recovery taking hold.
Fed Likely to Press on with QE Even as Business Lending Rises
The longer that gold remains under pressure from 'da goonz', the better the opportunity. Meanwhile, here is an updated graph, compliments of the St. Louis Fed, which was shown in NFTRH several weeks ago and excerpted here on the blog: Bank Loans Gently Bottoming?
The message was among other things, do not be a deflationist in this environment. This is why asset markets are rising; when money gets really scared (as the EFFECTS of inflation become more widely known) and becomes aware of the extent of inflation, we may indeed have a boom. But it may end up being von Mises' Crack Up Boom.
The signal in the gold-silver ratio would argue against this scenario, however temporarily. But gentle Ben is working not to let the GSR signal get out of control. The question remains, do you believe this great purveyor of 'inflation as economic driver' can control the markets indefinitely?
Anyway, here is the updated Bank Loans graph courtesy of St. Louis Fed. This still looks like a bottom I would buy, which means that the deflationist's 'velocity of money' argument could be about to go out the window, possibly along with my personal 'gold stocks above all others' stance, which requires an impulse toward economic contraction. I think the miners would do fine in the early stages of an inflationary economic recovery, especially considering the much needed sector correction that persists to this day (with some associated and compelling technical data points).
If - and in my opinion it's still a really big if - things stand on their current course, the US is setting up to stand alone as the nation that once again shows 'em how its done when promoting inflation. Down the line, the US will be forced to fight inflation the same way the global stewards of non-reserve currencies are forced to do now. Inflation is happening 24/7, gold is conveniently getting smashed and this is a war, not a battle.
Gold is fine, and if Ben gets his way, silver could yet be even finer, from a momentum perspective. But right now, as silver declines vs. gold, there is a negative divergence to inflationary aspirations.
Thus ends a rambling, somewhat jumbled post by blogger who is out of time. http://www.biiwii.blogspot.com
Gold This Morning: On the Good Ship Lollipop --Jon
Heavy overnight trade with prices being whipped like a rented mule all the way down to a current low of $1321.90 from where we have bounced with the impact of a block of jello and while I fear we may still have to endure more selling before we load up the truck, the facts haven't changed folks just that the sentiment is as nasty as recent reviews of Spiderman. The GSR is again elevated this morning ~49.60 but hardly provocative that our world awash in readies is about to get tight. Open interest is ~580,000 and a solid 10% less than last fall's so-called bubbly number. RSI this morning is at 32, and as far as I am concerned that is a pound the table number based on that same level being the exact launch pad for last summer's move. Roll into this mix that FEB options expire tomorrow and the roll is on out of FEB futures and into April; I'd add that option vols are beginning to elevate for the first time in several months, but are still cheap ~17. Outliers? Ireland, rate hikes, municipal or state shortages, State of the Union...got gold? http://www.biiwii.blogspot.com
Monday, January 24, 2011
GSR Chart from NFTRH119
It is a stellar earnings season after all, and Bloomberg did report on how the US offers a refuge from the inflation problems of much of the rest of the world. Good one, Bloomy! Pay no attention that that man behind the curtain, monetizing his own bloated, unpayable legacy debt.
So again, which is it? The happy people should hope that this is just an initial bottom before some muck and grind. Gold is doing what it did in that same scenario in 2008. So too is the SPX. If another red dot should appear however, the ship of fools is going to pancake but good. But then again, I am short the SPX, short the Nasdaq 100 and short the Russell 2k. So, like the bear commenters who used to frequent the blog last summer and fall telling me why I should not be bullish, I do not have market prices on my side yet. But I have a signal. If the signal negates I'll say "okay Gary, you screwed up very publicly again", have a laugh and move on. These are the markets.
But the idea of forward looking indicators is to look forward. Sure, you can look wrong for inconveniently long periods of time. I've been through these phases before and while they are annoying, I do not yet see a reason to change the tack. Risk is brutally high for the broad market. Unless Ben Bernanke, Tim Geithner and the president himself have had a special meeting with the ultra powerful people on Wall Street and passed some kind of stealth legislation for total control of the US stock market and the financial media that cheers it on, this will come out in the wash.
When I put on the tin hat, I see this scenario and I see my accounts lose value as the preferred precious metals sector obviously benefits from no such sponsorship. Quite the opposite, as official contempt is quite likely the sentiment there. Which is why the more direct silver hedge is in place. But then I take the foil off and realize that we are moving forward on the market's terms, not mine.
I am green on the silver and R2k shorts and red on the SPX and NDX. So be it. They will either win big or be closed out in ignominy. There is comfort in having been here before. It is not a sprint.
Time and patience. Boring concepts in a go-go bull phase, and a pretty nasty PM corrective phase for that matter. This space can rub silver advocates the wrong way, but ultimately, taking out the emotion, the Gold-Silver Ratio is nothing but an indicator. The gold standard in the world of market indicators, in the clarity of its message. http://www.biiwii.blogspot.com
Silver-Gold Ratio, different this time?
The S&P 500 would have us believe yes. Forget about the Trannies, the small caps and the Nasdaq to a degree. One problem for the market however; last week in NFTRH119 we reviewed the lag in 2008 from the time that silver began leading gold down to the time that the SPX finally rolled over.
So what is it going to be, SPX keeps levitating higher and silver reverses and leads the PM's higher or a less happy alternative (for the broad market, at least)? Interesting market, but there is precedent. http://www.biiwii.blogspot.com
So what is it going to be, SPX keeps levitating higher and silver reverses and leads the PM's higher or a less happy alternative (for the broad market, at least)? Interesting market, but there is precedent. http://www.biiwii.blogspot.com
Gold This Morning: Another Brick in the Wall -Jon
Heavy overnight volume while underpinning higher prices right from the opening have yet to take out a couple of obvious resistance points in the mid $1350's. Since FEB options expire Wednesday one would expect static trade for the next couple of days as the expiration jocks maintain the round number ($1350?). However, having just checked outstanding puts and calls on the expiration I am surprised at how heavily the $1320-70 expiration range is still weighted to puts and since the facts continue to be supportive for higher gold prices perhaps we can induce some nervous bear option holders to join our little party. The Facts? GSR is easier at ~48.90, open interest continues to come in and is now ~578,000 contracts, and RSI remains oversold at under 40. The weekly COT numbers showed commercials as net buyers for I believe the 3rd consecutive week and these are the smart guys covering their hedge books. The not so smart guys and sissies were net sellers. Today: The bulls have their hods filled as long as the ladders aren't pulled from under them. I was reminded by the perspicacious MT that last week I neglected to mention higher gold (and other commodities) margin requirements had been imposed by the many regulators who mindlessly take their marching orders from greater powers who may be aware of positions deleterious to their health and job security...what else is new? http://www.biiwii.blogspot.com
Sunday, January 23, 2011
NFTRH120 Out Now
On a risk vs. reward basis, the gold sector has come to a much healthier place than it was in December, and 2011 promises to unfold in a very interesting fashion. As for the here and now, the Spec portfolio is down 6% for the new year, is managing risk and biding its time until what I believe will be a very different year from 2010, unveils the new trends.
Have a great remainder of your weekend. http://www.biiwii.blogspot.com
Edit (1/24 @ 7:15)
"One of your best"... Investment firm partner, fund manager
"Great work, thank you much"... Financial Blogger, private investor
Friday, January 21, 2011
CoT Interpretation...
Quickie version from one cranky blogger...
Commercials (the great Satan in the eyes of the gold 'community') continue to unwind shorts.
Large specs and little fellers lurch hard to the short side.
Gold CoT is very BULLISH, although not a tight timing tool!
Silvernot bad (actually blah) and you'd like to see the specs getting more bearish as the decline continues. http://www.biiwii.blogspot.com
Commercials (the great Satan in the eyes of the gold 'community') continue to unwind shorts.
Large specs and little fellers lurch hard to the short side.
Gold CoT is very BULLISH, although not a tight timing tool!
Silver
CoT Gold & Silver Report: Let's just say I like the my GTU position
GOLD - COMMODITY EXCHANGE INC. Code-088691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/18/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 100 TROY OUNCES) OPEN INTEREST: 801,933
COMMITMENTS
244,054 54,620 212,435 267,727 501,345 724,216 768,400 77,717 33,532
CHANGES FROM 01/11/11 (CHANGE IN OPEN INTEREST: 5,985)
2,604 15,055 3,001 2,425 -16,148 8,030 1,908 -2,045 4,077
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
30.4 6.8 26.5 33.4 62.5 90.3 95.8 9.7 4.2
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 407)
232 92 157 61 56 347 259SILVER - COMMODITY EXCHANGE INC. Code-084691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/18/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 5,000 TROY OUNCES) OPEN INTEREST: 183,207
COMMITMENTS
40,042 8,025 70,082 39,851 88,252 149,975 166,360 33,232 16,847
CHANGES FROM 01/11/11 (CHANGE IN OPEN INTEREST: -1,747)
2,506 1,964 -2,387 -304 -1,772 -186 -2,195 -1,562 448
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
21.9 4.4 38.3 21.8 48.2 81.9 90.8 18.1 9.2
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 197)
98 44 69 38 39 166 128
Feedback from a blog reader
I know I piss a few people off; is he a gold bug? Why does he seem to hate silver? Why all the bitching and moaning about the financial services industry? What's his problem?
My problem is groupthink and convention. This human need to cluster with people of a like mind and carry forward into battle with your particular flag held high.
Well, that does not work so well in the financial markets. It's automatic thinking, and it can get you killed. There should be no clubs, like Team Bear, Team Gold, Team Silver, Team Commodity Complex and certainly not Team Stock Bull. The market just is... Joining up imposes mental restrictions upon the market participant.
What happens when the market eventually goes against you? Sure, some of your team mates are there to console and reinforce perceptions until it is all okay again. Some are long gone as you hold your bag, and flag.
Anyway, two things today got me on this. One was a Facebook exchange with a gold and silver advocate... and the other is an email that came in from blog reader Mark. I want to make one thing clear; before I began writing publicly, I thought all financial services professionals were dumbasses at best, and totally uncaring about clients' welfare at worst. Now I realize there are many - including those in NFTRH's subcriber base - who are all about doing the right thing, including Mark here...
P.P.S. I also am an original subscriber to Jeff Kern at SKI.
http://www.biiwii.blogspot.com
My problem is groupthink and convention. This human need to cluster with people of a like mind and carry forward into battle with your particular flag held high.
Well, that does not work so well in the financial markets. It's automatic thinking, and it can get you killed. There should be no clubs, like Team Bear, Team Gold, Team Silver, Team Commodity Complex and certainly not Team Stock Bull. The market just is... Joining up imposes mental restrictions upon the market participant.
What happens when the market eventually goes against you? Sure, some of your team mates are there to console and reinforce perceptions until it is all okay again. Some are long gone as you hold your bag, and flag.
Anyway, two things today got me on this. One was a Facebook exchange with a gold and silver advocate... and the other is an email that came in from blog reader Mark. I want to make one thing clear; before I began writing publicly, I thought all financial services professionals were dumbasses at best, and totally uncaring about clients' welfare at worst. Now I realize there are many - including those in NFTRH's subcriber base - who are all about doing the right thing, including Mark here...
Hi Gary,
Once again I must congratulate you on your Dow target of 11880 having been reached today.
Matt and Steve at BPTrades (I'm a subscriber) have this area as a potential top of some significance.
A major decline here would fit nicely with Martin Armstrong's ECM major turning point due on June 13, 2011.
Mark
P.S. I've had my own independent financial planning practice for 33 years. I take no offense at your jabs at our industry. I agree with you. 99% of my peers are morons. My entire practice has been a market timing practice for the last 20 years.P.P.S. I also am an original subscriber to Jeff Kern at SKI.
http://www.biiwii.blogspot.com
GTU hit negative premium to NAV
...so I shorted silver again and bought this holder of "pure, refined gold bullion" now that gold bug sentiment is heading toward the dumper. http://www.biiwii.blogspot.com
Silver still NOT bullish...
No matter the feedback I get from PM bulls. I do not paint the charts, I just color them up with serious looking resistance and support way down below. http://www.biiwii.blogspot.com
I love silver!
Just kidding, but I am no longer bearishly against it. Final hedge, SLV Puts, sold this morning. Attention on the broad market now. SLV has more downside work to do IMO, however as its downside can be expected to lead that of gold in the near term. May or may not pick up more silver bear positions going forward. I am a precious metals bull after all. ;-) http://www.biiwii.blogspot.com
Doctor Copper's got the prescription
Problem is, we don't know what it is yet. If I were a gamblin' man I'd say he is going to prescribe a breakdown to the SMA 50, shakeout of the momos, rise back to test the highs, suck in the momos, and then tank for real. But what do I know? I ain't no doctor. http://www.biiwii.blogspot.com
Gold This Morning: Hold That Line --Jonathan
Active trade overnight and I am immediately defaulting to the comments of our ace technician Rich Ross, who published the following on gold last night, "While prices and momentum have eased, our analysis continues to suggest that the action in gold is consistent with a healthy corrective pause within an ongoing bull market. The 5% pullback to key support offers a compelling entry point on the long side. We have tightened up our market to $1,339 for initial support and would be strong buyers from here down to $1,309." The facts: Open interest came in another 5,000 contracts, yesterday's turnover was enormous, GSR has risen to ~49.30 and while It's hardly a trend breaker yet a move over 50 will boggle the sissies. Today we have to hold the level and any bullish impulse will have to clear the mid $1350s. The GLD ETF options expire today and the put call ratio is huge to the put side...I cannot don the tin foil and and spew a conspiracist rant. Have a good weekend. http://www.biiwii.blogspot.com
Thursday, January 20, 2011
SLV breaks the neck line & fails support - 60 min. chart
For those keeping score at home... how does the supply/demand, 'silver is cheap relative to gold' hype sound right about now? I reduced my short exposure but the technicals say silver is going lower short term, possibly after a test of the breakdown. Silver is not gold is not copper is not tin. See? Silver will go up at whatever time the speculative spirits get stirred up again, and not until. http://www.biiwii.blogspot.com
Speaking of the GSR...
Looking at the GSR & SPX inverse each other, it has the appearance of a giant alligator jaw looking to clamp down on broad market participants. But back to the here and now, the signal is stronger yet with the EMA 10 crossing over the EMA 20. http://www.biiwii.blogspot.com
Edit (12:28) Covering SLV short, selling ZSL and holding SLV puts and looking to poss. replace with increased broad market shorts.
Edit (12:28) Covering SLV short, selling ZSL and holding SLV puts and looking to poss. replace with increased broad market shorts.
Most frightening chart in the world... biiwii version
A few years ago I had some fun with 'the most frightening chart in the world' as its creator called it. It was a chart of gold getting linked around the internet with gold at oh... the 800's or so? The analyst projected a decline to the 200's. Here is one of what I consider the most frightening charts in the world, done up many months ago and re-config'd with a blog reader's (now an NFTRH subscriber) observation, i.e. the second oval. As the GSR signal pops again today, ponder this chart. http://www.biiwii.blogspot.com
Gold This Morning: Hu Do You Love? --Jon
Modest overnight trade with a selling bias almost right from the 1800 EST opening. On two occasions $1362, a well-advertised line in the sand was pierced but neither instance has provoked serious selling to new lower levels yet. Open interest as of Tuesday was surprisingly lower ~5,000 contracts perhaps due to the beginning of the roll out of FEB and into APRIL and more likely as I continue to believe a continuing distribution pattern. GSR rose slightly to ~48.00 more a factor of the volatility of our frolicsome friend. RSI is in again and trembling around 40.00 below which it surely enters definitive oversold territory. Yesterday morning there was acive bidding with firmer vols for the expiring 1400 contract; I guess I should have hit the bid. Today: The action from a bull perspective is truly miserable and given that we are in a two week period of active option expiration and a roll to the new forward month we should get some resolution of this almost 5% decline from the all-time high (shocking!). http://www.biiwii.blogspot.com
Wednesday, January 19, 2011
Bearish Feel
...but rather than increase shorts (on silver, SPX & IWM), I think I will reduce remaining non-gold stock longs beginning w/ HH, but also possibly including URA (Investment? I guess not) and FXI. Some or all are to be sold here, although the FXI chart looks the most bullish and I just may hang on for a bit. In honor of Mr. Hu and all...
Gold-Silver Ratio still in play
GSR signal remains persistent. Anybody watching outside of you and me? http://www.biiwii.blogspot.com
SLV 60 min. - Bearish tolerance
Adding likely tolerance zone, above which hedge may be dropped or sharply reduced. http://www.biiwii.blogspot.com
Gold This Morning: No... Hu's on First --Jonathan
Modest overnight trade struggling to reach and coming within ticks of rising above yesterday's high; we are truly in a Sisyphean struggle to break the bonds of the present trading stalemate. Let's go the facts and numbers as they are still on our side. GSR after tipping its hat last week, provoking agonizing Cassandras to definitively announce the end is near, has eased back to ~46.90. Open interest is creeping higher but leaves plenty of room for new money. RSI(14) still presents a come hither stare at ~46.70. Furthermore our cheaper(by the ounce) and more frolicsome fellow metals as in silver and palladium are banging on the door to see if we can come out and play. Visual of the day: My friends and partners in Tunis told me that former president and first lady Ben Ali were seen running with their cohorts to their waiting escape plane dragging bags with bars of gold. It's nice to see that some people still save the old-fashioned way. http://www.biiwii.blogspot.com
SLV 60 min. chart
But in practice, it is actually a mechanical thing. When I see the gold-silver ratio make what looks like a massive H&S bottom on a weekly chart, I sit and stare at it for weeks on end, respecting its bearish possibilities as long as it is intact. It breaks down? I drop risk management and let portfolios run. This is what happened last summer.
Now? There is a much more nascent bearish sign in the GSR and I respect it as well. Believe me, you do not want the TA guy going free style and seeing what he wants to see. So I have some silver shorts against a healthy bunch of gold and silver stocks (just added to Fortuna Silver position last week and added MFN per the smart analyst at IKN's reco). In short, I know that when I am making money in my PM positions, silver is usually out front, leading.
As to the chart, just doing a little micro management of a potential topping pattern that could bring on a healthy decline to one or both of the noted gaps. If you are not a day trader or momentum trader, why would you care about a healthy pull back? As yet, SLV has not triggered anything bearish and if it gets through this little test and goes bullish again, I will just get out of the way. Why make things more complicated than that? I added some gold positions in last week's smash, added back a former core member that got clobbered on financing yesterday and each day look to add to a growing list of quality holdings. Having silver bear hedges in place helps me add potentially epic longer term trades as I see them become available.
In short, there's more to market management than black and white, bullish and bearish. There are time frames, contexts and game plans. http://www.biiwii.blogspot.com
Tuesday, January 18, 2011
U's still looking good
Buy last summer when everyone hated 'em. Sell some individual U's for around 100% profits. Buy URA, take another profit. Buy URA again and hold? Well, the sector certainly owes me nothing. Maybe I can hang on to the Global X fund as an investment. Dunno. But I am liking it. http://www.biiwii.blogspot.com
Silver Bear ZSL Looks Bullish
which means silver doesn't. I remain a gold bull and simply love the gold CoT structure, but the chart is the chart and I remain not technically bullish on silver in the short term and continue to hedge gold positions with bearish ones on poor man's gold. Just one lowly player's opinion. http://www.biiwii.blogspot.com
Dallas Fed President Attacks Ron Paul...
From NFTRH119, and part of what may have irked subscriber Jeff (as political commentary certainly is NOT my strong suit). You would think I would have learned to keep our society's two primary cartoons, the Democrat and Republican parties, out of it.
"The favored script has the entire inflated stock and commodity construct following the
PM’s down before too long. There would be talk of deflation, of economic failure and
the need to stimulate. With the Republican Party looking ever more like the cartoon it
was pre-2008, one wonders about the ability of the newly influential austerity movement
led by Ron Paul to implement change. If this movement is swept under the rug, the Fed
will have a free go at saving us once again. That would launch the epic upside in the
precious metals that gold and silver bugs so lust after. Some of them may even be aboard
when the time comes. Meanwhile, PM’s take the pain first in anticipation of one day
leading a new party of their own."
Now review Gary North's Dallas Fed President Attacks Ron Paul, which is the top item here: http://www.biiwii.com/analysis.htm. Thank you Mr. Fisher for validating my tin hat. Now I will take it off, and go back about navigating this cacophony. Don't you just love the markets? The cartoon-like monetary system? Cartoon-like officials playing to a cartoon-like script? It's fun. You have got to love this or else you need to take a pill, find a financial professional to manage your funds in all the standard ways and find other sources of joy. http://www.biiwii.blogspot.com
"The favored script has the entire inflated stock and commodity construct following the
PM’s down before too long. There would be talk of deflation, of economic failure and
the need to stimulate. With the Republican Party looking ever more like the cartoon it
was pre-2008, one wonders about the ability of the newly influential austerity movement
led by Ron Paul to implement change. If this movement is swept under the rug, the Fed
will have a free go at saving us once again. That would launch the epic upside in the
precious metals that gold and silver bugs so lust after. Some of them may even be aboard
when the time comes. Meanwhile, PM’s take the pain first in anticipation of one day
leading a new party of their own."
Now review Gary North's Dallas Fed President Attacks Ron Paul, which is the top item here: http://www.biiwii.com/analysis.htm. Thank you Mr. Fisher for validating my tin hat. Now I will take it off, and go back about navigating this cacophony. Don't you just love the markets? The cartoon-like monetary system? Cartoon-like officials playing to a cartoon-like script? It's fun. You have got to love this or else you need to take a pill, find a financial professional to manage your funds in all the standard ways and find other sources of joy. http://www.biiwii.blogspot.com
Gold This Morning: Knock Knock... HU's There? --Jonathan
Active trade overnight, particularly after a holiday, with selling pressure, unusual of late, absent. In fact since last Friday's plunge to the mid $1350s brought out the last of the hysterical former bulls blaring warnings of possible punishing and retributive corrections (how many bulls are left after this hideous ~5% decline) the sellers must be on a metaphorical cigarette break hanging around the outside and wondering how to get back in. The facts remain modestly supportive with GSR slightly easier at ~47.50 and RSI still provocatively fluttering ~44. Open interest is creeping back toward 600,000 and most notably last week's COT report which got lost somewhere in the swamp of a long weekend showed Commercials reducing short exposure for a second consecutive week...but what do they know? We close today with an exclusive leak from the oval office where the President, meeting with Ben and Tim, seeks assurance that we maintain a jolly reception for our guest this week, the President of China. "Boys, are we keeping the USD cheap, bonds firm, and laying off gold?...Check, Mr. President, the orders have been placed" We roll out the welcome wagon. http://www.biiwii.blogspot.com
Japan Smaller Caps hit target (JOF)
From NFTRH116, drawn up as JOF was consolidating above the neckline breakout. FWIW, I personally failed to capitalize. http://www.biiwii.blogspot.com
Monday, January 17, 2011
30 Year - 2 Year Spread & GSR
Okay, so getting back to what I am really interested in... do you suppose the spread will prove before too long, to have led the GSR yet again? Hmmm? http://www.biiwii.blogspot.com
Blue Pills, continued...
Okay, if a subscriber or two think I wear a tin hat on occasion, they might check this out. 6% Psychopaths over at GoldSeek, forwarded by another subscriber this morning.
"I submit that the United States government is under the control of psychopaths"
I took an interest in collective psychology a long time ago and in reading books like Meeting the Shadow (a life changer), The Sane Society and We've Had 100 Years of Psychotherapy and the World's Getting Worse, along with that photographic 'coffee table' picture book of the Armenian Genocide I grew up with, I have been well aware of the potential for societies to go insane, get dumbed down, and open the door for unspeakable evil.
Talk of 'banksters', cabals, illuminati and master planners puts a nice, cartoon-like picture on the concept of human evil. But I will stick with the same theme I have put forward since I began writing in 2004; it is up to the individual to wake the fuck up, separate actionable information from bullshit as best as possible, teach, prepare and keep an open mind that is not so open that every single immobilizing and terrible info-byte gets into the psyche. Otherwise, you join the Goldbug's Union, Local 101. :-)
So that's where the newsletter comes from. This is a financial market blog and it is a financial newsletter written by someone who has learned to use some tools to keep on the straight and narrow. My personal view is that Bernanke is something of a dullard; a myopic bureaucrat doing what so many before him have done, on auto-pilot. I believe greed has infected the highest levels of society, the media dumb down the populace and government is not controlled by psychopaths, but rather, non-critical thinkers who are a reflection of the society they represent.
This could go on and on, but I'll nail it here. NFTRH will continue navigating and capitalizing and yes, its writer will show a human side from time to time. But at the same time, I will not forget to enjoy life and suggest you do not either. It is too precious to get caught up and overly fascinated by ghost stories. Is what it is, man.
With that, the writer recedes and goes back to business as usual. Move along ladies and gentlemen, nothing to see here...
"I submit that the United States government is under the control of psychopaths"
I took an interest in collective psychology a long time ago and in reading books like Meeting the Shadow (a life changer), The Sane Society and We've Had 100 Years of Psychotherapy and the World's Getting Worse, along with that photographic 'coffee table' picture book of the Armenian Genocide I grew up with, I have been well aware of the potential for societies to go insane, get dumbed down, and open the door for unspeakable evil.
Talk of 'banksters', cabals, illuminati and master planners puts a nice, cartoon-like picture on the concept of human evil. But I will stick with the same theme I have put forward since I began writing in 2004; it is up to the individual to wake the fuck up, separate actionable information from bullshit as best as possible, teach, prepare and keep an open mind that is not so open that every single immobilizing and terrible info-byte gets into the psyche. Otherwise, you join the Goldbug's Union, Local 101. :-)
So that's where the newsletter comes from. This is a financial market blog and it is a financial newsletter written by someone who has learned to use some tools to keep on the straight and narrow. My personal view is that Bernanke is something of a dullard; a myopic bureaucrat doing what so many before him have done, on auto-pilot. I believe greed has infected the highest levels of society, the media dumb down the populace and government is not controlled by psychopaths, but rather, non-critical thinkers who are a reflection of the society they represent.
This could go on and on, but I'll nail it here. NFTRH will continue navigating and capitalizing and yes, its writer will show a human side from time to time. But at the same time, I will not forget to enjoy life and suggest you do not either. It is too precious to get caught up and overly fascinated by ghost stories. Is what it is, man.
With that, the writer recedes and goes back to business as usual. Move along ladies and gentlemen, nothing to see here...
Sunday, January 16, 2011
Take your blue pills... NFTRH119 Out Now
While there is a stubborn persistence in the broad and hopeful global rally in rejecting the message of the precious metals and the Gold-Silver Ratio, things will be sorted out soon enough if the historical view that #119 takes a look at is a useful guide.
I feel that NFTRH119 is the best letter I have ever written. Not sure if that is just my perception or something approaching reality. It is written by an analyst sporting negative 2011 performance and a somewhat frustrated mindset. But it also seeks to dissect the dynamics in play and intelligently interpret them. I think it does that pretty well.
NFTRH119 out now. Enjoy the remainder of your weekend... and GO PATS! http://www.biiwii.blogspot.com
Edit (11:52) And typical of the human condition, you think you did well and a voice of reason chimes in and recalibrates your hubris. Subscriber 'Jeff', a long time Wall Street veteran who lived through the last precious metals bull and inflation hysteria in the 70's, initiates this email thread. FWIW, I agree with him although I purposely let some emotion that I was feeling get into the letter but tried like hell to more than balance it out with cold analysis.
Edit (1/17 @ 11:09) Okay, I just re-read 119 for the first time and I will go back to my first instinct. I think it is the, or among the best I have written. Sorry, but that is how I feel about it. Any hyperbole is intentional and metaphorical. A couple expressions of human emotion are purposeful and in my opinion, not damaging to the message. Rather, at least in my read, they blend with it.
Gary
Was it Shakespeare who wrote "thou protest too much"?
Far too much of your letter focused on Bernanke and his motives, far too much on conspiracy, far too much on real and contrived Machiavellian assorted conspiracies. It was, for me, a little too many blue pills. While you busily kept attempting to dismiss the "contrived climate", you kept right on painting assorted pictures. Your anger at it kept coming through
I remember an exchange we had a few years ago: you don't know Bernanke's motives, any more than I do. But if you over speculate about it....or over dramatize, you dilute your good work. The message gets lost.
Your technical approach is excellent. Creative, insightful, and unique. Unfortunately, your political commentary isn't. Yes, I know it's your letter, and you are free to write as you see fit. But I do think you take great pride in your work, and do not shy away from helpful critique. It is something we all benefit from occasionally.
Regards,
Jeff
***Was it Shakespeare who wrote "thou protest too much"?
Far too much of your letter focused on Bernanke and his motives, far too much on conspiracy, far too much on real and contrived Machiavellian assorted conspiracies. It was, for me, a little too many blue pills. While you busily kept attempting to dismiss the "contrived climate", you kept right on painting assorted pictures. Your anger at it kept coming through
I remember an exchange we had a few years ago: you don't know Bernanke's motives, any more than I do. But if you over speculate about it....or over dramatize, you dilute your good work. The message gets lost.
Your technical approach is excellent. Creative, insightful, and unique. Unfortunately, your political commentary isn't. Yes, I know it's your letter, and you are free to write as you see fit. But I do think you take great pride in your work, and do not shy away from helpful critique. It is something we all benefit from occasionally.
Regards,
Jeff
That is because I am angry Jeff. It was honestly written.
I am not going to pretend to be a robot. Sometimes this is what comes through. But my best effort was made to keep the analysis on an unbiased path. Do me a favor and read again.
As a human, I have conflicts and contradictions just like anyone else. Funny, I thought it was one of my best letters.
I am going to put your critique on the blog, if you don't mind.
Regards,
Gary
***I am not going to pretend to be a robot. Sometimes this is what comes through. But my best effort was made to keep the analysis on an unbiased path. Do me a favor and read again.
As a human, I have conflicts and contradictions just like anyone else. Funny, I thought it was one of my best letters.
I am going to put your critique on the blog, if you don't mind.
Regards,
Gary
Gary
That is precisely my point. It was a very powerful letter. One of your best. BUT, it was diminished nevertheless by the Bernanke/conspiracy/etc. stuff. That's all I'm saying.
It's a fine line we all walk in life. I always found it helpful when others helped me along the path
Don't fret
Jeff
Friday, January 14, 2011
CoT hot off the presses...
Run away large spec's and cover dem shorts you evil commercials!! ;-) I don't care what prices do in the short term, the gold CoT ain't bearish.
http://www.biiwii.blogspot.com
http://www.biiwii.blogspot.com
GOLD - COMMODITY EXCHANGE INC. Code-088691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/11/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 100 TROY OUNCES) OPEN INTEREST: 795,947
COMMITMENTS
241,451 39,565 209,434 265,301 517,493 716,186 766,492 79,762 29,456
CHANGES FROM 01/04/11 (CHANGE IN OPEN INTEREST: -558)
-15,494 7,343 15,647 9,231 -18,269 9,385 4,722 -9,943 -5,279
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
30.3 5.0 26.3 33.3 65.0 90.0 96.3 10.0 3.7
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 393)
236 75 147 61 57 339 243SILVER - COMMODITY EXCHANGE INC. Code-084691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/11/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 5,000 TROY OUNCES) OPEN INTEREST: 184,954
COMMITMENTS
37,537 6,061 72,469 40,155 90,024 150,161 168,555 34,794 16,400
CHANGES FROM 01/04/11 (CHANGE IN OPEN INTEREST: 385)
-1,614 -1,671 3,070 1,687 -738 3,144 661 -2,758 -276
PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
20.3 3.3 39.2 21.7 48.7 81.2 91.1 18.8 8.9
NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 198)
93 46 71 36 43 164 132
Financial Media on full pump...
From Bloomberg: US Stocks In Sweet Spot as Emerging Markets Tighten
Ha ha ha... yes, the US continues with its inflate or die policies and this is preferable to productivity and resources based emerging markets who have the audacity to fight inflation in a relatively sensible way.
Silly Bloomberg, silly MSM and ultimately, silly investors who listen to these crack addicts. Mr. Bernanke is monetizing unpayable debts and may well float his asset bubble. But don't tell me this is anything even approaching normal or healthy, Mr. MSM.
Ha ha ha... yes, the US continues with its inflate or die policies and this is preferable to productivity and resources based emerging markets who have the audacity to fight inflation in a relatively sensible way.
Silly Bloomberg, silly MSM and ultimately, silly investors who listen to these crack addicts. Mr. Bernanke is monetizing unpayable debts and may well float his asset bubble. But don't tell me this is anything even approaching normal or healthy, Mr. MSM.
Gold This Morning --Jonathan
Active overnight trade with ruthless selling forays that began after yesterday's COMEX close continuing to pressure gold. One source of the selling is structural which stems from annual rebalancing of commodity index funds and clearly impacted gold and silver due to their moves last year. Another may indeed involve position trimming in anticipation of the dithering CFTC finally dealing with the totally unnecessary position limit ecstasy. However these technically wholesome and in many ways invigorating events have clearly attracted the robust fringe of those of whom Sir Alan Greenspan once said, "An almost hysterical antagonism toward the gold standard..." Yes there is a lot of selling that has pushed the price of FEB gold just a little over 4% off its all-time high, boo-hoo. The technicians tell us there is some strong support around $1357. The facts tell us that GSR is slightly elevated ~48.00 given the volatility and hardly a matter of concern. Open interest is virtually unchanged and I would note that last weeks COT showed significant large spec liquidation (the commodity indexers?) more or less offset by commercial buyers (typically sellers of futures). RSI has slipped to ~41.0 this morning close to the lows of last July which launched a $200 run higher. Toss into this mix this morning's consumer price index, for what it's really worth in the event you haven't tanked-up lately, and while the gold price is clearly pressured and unpredictable the basic case is hardly on the precipice of some great chasm. http://www.biiwii.blogspot.com
Gold, Part 2
Gold bugs who have been root root rooting for the home team along side silver bugs, copper bugs, oil bugs and stock tout bugs are right about now getting past nervous and on to revisions. It is the wash, rinse, repeat cycle my friends; look like a champ while the trend lasts and then revise...
Here is the chart from the gold article that inspired the following comments as it was reproduced at SeekingAlpha, haven for contrarian analysis. From NFTRH118, some of the comments [with my thoughts]:
“Good luck with your USD longs - you'll need it! All fiat currencies return to their
natural worth. Paper.” [USD longs will be put to good use]
“I think you have to say what you really mean. I think you don't want to say that fear has
entered your investment analysis. Remembering that fear is an emotion, and emotion is
an investor's worst enemy.” [Fear always enters my analysis when you are brave]
“Technically; this isn't even anywhere near a correction - and we're $300 bucks up on
this point last year.” [From your lips to God’s ears, but…]
“Agreed. Silver supply is VERY tight. It has been reported by Sprott that they have finally
been delivered their physical silver, for their newly created PSLV after waiting since
purchase in early Autumn.” [What do I know, I am usually wrong on silver. :-)]
“If you think Gold's correcting, how much? -10 -15% decline isn't even a Seasonality
shocker, you shouldn't be "playing" Gold if you don't already know that.” [I hear ya]
And my personal favorite, from a Seeking Alpha contributor (writer) who once
approached me with a deal to ‘follow’ me if I will ‘follow’ her. I declined, as this
appeared to be in conflict with her self-proclaimed devotion to ‘meritocracy’.
“In any case, this latest bout of Dollah! Dollah! Dollah! Baby Gaming has been
especially disturbing because it's been so transparently contrived. Listen to any of the
Gold Baiters and Haters as they mouth their scripts right now. They can hardly read
them without flushing bright red, stammering, and having their voices go up two octaves.
They're like abject amateurs in a high-school play. Or - as we've said before - yapping
little Chihuahuas.”
The chart, for those keeping score at home? MACD weekly triggered down from over bought. RSI on the way down from over bought but still well above support at around 50. And STO having bearishly declined below 80. Good stuff, because we are finally getting rid of the momo's, pumpers and 'to da moon' flight captains.
I am always more bullish in gold when the company thins out, and that is what is happening now. The gold-silver ratio has a chance to really do some damage and get the precious metals herds scattering first and with any luck, the entire casino rushing for the exits before too long. But for now, precious metals bulls are pretty much alone in the house of pain.
The most obnoxious outcome for me personally would be that policy makers win, are able to create a lasting economic rebound out of nothing but debt issuance and money creation. It would be obnoxious because it would be created out of dishonesty and would imply that powerful people can manage the formerly free market at will. Of course, I do not expect this to happen, but patience may be required in trying to rein in the pig. If history repeats, the GSR will act as something of a credit spread, as Bob Hoye would say. It would indicate the contraction in the spread between the speculative party and conservative, sound thinking.
The GSR, if it is indeed bottoming and turning up, should take down all parties with the first to be taken down, the gold sector, eventually becoming the first to recover. Just like out of the 2008 destruction.
Here's the updated chart showing a fattened pig, vulnerable to a would-be rise in the GSR. On a risk vs. reward basis, the gold stocks are the best bet going forward. But until near term events sort out, the going would be rough there as well and protection of positions is the way to go. In my opinion, 2011 stands a chance to be epic, but it is not going to be as easy as 2010. Put your thinking caps on and remember that the loudest voices at any given moment are probably the ones telling you to do the opposite of what might be in your best interest. http://www.biiwii.blogspot.com
Thursday, January 13, 2011
Gold-Silver Ratio: Still constructive (destructive)
If GSR maintains the bottoming posture (above EMA's 10 & 20) it will be constructive for a rise in the indicator and destructive for the momo's, pumps, pom pom squads, etc. http://www.biiwii.blogspot.com
Good for goose, good for gander?
If we are going to talk about the HUI's massive breakout above all time highs resistance, maybe we should consider the QQQQ's break above long term resistance (although very significantly this former bubble is way below the ATH). Implications? If HUI continues upward, maybe we will get a good dose of tech mania as well. Conversely, if the Cube fails, why would we not expect the HUI to at least temporarily fail its breakout as well? Not saying this will happen, but in the interest of technical fair play and objectivity...
PS: That green line is obviously the point where my former short on this index failed. http://www.biiwii.blogspot.com
PS: That green line is obviously the point where my former short on this index failed. http://www.biiwii.blogspot.com
Gold This Morning: Hiding in Plain Sight -Jon
FEB gold continues to wobble bumper-car like between the high $1370s and the upper $1380s. Turnover is average and punctuated by accelerated spurts indicating either a now tired-looking distribution process or manic directional players attempting to provoke moves as we commence the roll period from FEB to APRIL. The facts continue benign with GSR up a touch overnight to ~47.0 and open interest ~4,000 contracts higher basis Tuesday. RSI is creeping higher and is now barely under 50. FEB options which expire in 13 calendar days were under 15 this morning indicating complete volatility indifference and perhaps buttressing the distribution case. Today: Expect a continuance of trading within the range while keeping an eye on the feeble USD performance. http://www.biiwii.blogspot.com
Wednesday, January 12, 2011
Smart/Dumb confidence turning back down
As of yesterday, the aggregate 'smart' money took a lurch lower and of course the corresponding 'dumb' money lurched higher. In the spread between the two, -.25 is red lined (bearish) and as of yesterday it was at -.46, dangerously red lined. Wanna bet this condition has pushed even further with today's 'yey, Europe is gonna be okay!' pump? How long can the party roll on?
Just picture a bunch of 70's people with bad haircuts, doing funny dances to really dumb music. That is our stock market. Bartender Ben splitting time as the disc jockey. "Stayin' alive... stayin' alive... ah ah ah ah staying aLIVE!"
Just picture a bunch of 70's people with bad haircuts, doing funny dances to really dumb music. That is our stock market. Bartender Ben splitting time as the disc jockey. "Stayin' alive... stayin' alive... ah ah ah ah staying aLIVE!"
Uranium (URA)
Well this trade worked out well. Buy the wedge at support. Trade still ongoing and may or may not turn into a hold. Dunno yet. http://www.biiwii.blogspot.com
Equity Put/Call - Ugh
I will remind myself that I am only short as partial protection to longs. But here is a chart that says I may be overly being a sissy. If you want to read the $CPCE a certain way, you could read that a mother of a capitulation lay ahead, with a crescendo of public participation and bear loathing still to come at a double bottom of the EMA 20. Like gulp... SPX 1450? You have got to love the markets. http://www.biiwii.blogspot.com
China (FXI)
This is interesting as FXI pounds through the resistance and the SMA 50. As a leader it is another NOT BEARISH sign for the broad market short term. As for my FXI position, I will likely hold it for as long as I hold short the SPX, or maybe even longer, since this is a play on the "global leveling of the playing field" of which, I am ultimately a proponent. http://www.biiwii.blogspot.com
We have watched the China 25 ETF (FXI) as a leader of both the US and global rallies, and as an indictor for emerging markets, which generally being resource and commodity based, tend to rely on China and the perception that the China story is strong.
While many emerging markets and commodities remain relatively strong, the FXI took a
healthy correction, as word out of Central Planning is that monetary policy is being
tightened to rein in inflation.
I like this chart on a relative basis, given that this is a rare market that has tested its SMA
200, and the government it is associated with is at least talking sensibly. FXI has
declined from predictable resistance at the SMA 50 and it will be interesting to see what
it does here above the noted support level around 42.
Subscribe to:
Posts (Atom)