NFTRH159 Summary...

I am going to try to find emergency internet access, but all locations I have checked so far are still out, with projected return of power still days away. We have a generator, but I have little faith in Comcast to pull a rabbit out of the hat.

Thus, a quick summary of #159, section by section:

Opening segment:

Greed is indeed returning. SPX has exceeded critical resistance but is in need of a pullback from over bought. There is support at 1260, but critical support for bulls is 1220.

Sentiment among the dumb money (AAII especially) is rising with the market and thus, this market is not climbing a wall of worry. Insiders are selling the rally as dumb money buys it. Still, SPX has loaded 1360 as its target pending a hold of critical support.

Longer term charts paint this as a bear market rally until proven otherwise.

Global Markets

World Leaders (NYL) have already rebounded to near the limits of a 'bear rally' and above 6000 would begin to open a discussion of 'new cyclical bull'.

China 25 (FXI) rebounded from strong support (2008 cluster) and is now near strong resistance.
Emerging Markets same thing.

German DAX targets 7000 off of bottoming pattern. Can pull back to support @ 6000 first.

Commodities

Copper in need of correction, but ultimately targets 3.90 a lb. WTIC targets 104 off of a 'W' bottom. Commod indexes have significant resistance however.

Precious Metals

HUI target 629 off daily 'W' bottom pattern. Traders should become cautious there. GLDX is A-B-Cing up toward gap @ 15. Can pullback a bit first.

GDXJ still under H&S neckline. Looks to joing SLW, SIL, etc. in negating H&S. I still do not like this ETF due to holdings and silver content.

Gold steady Eddy, but can easily continue to consolidate vs. many commodities and currencies. This being a counter trend bull relief rally and all.

HUI-Gold ratio still indicates VALUE in quality gold stocks. Esp. when considered along with the 'REAL' price of gold.

Warning: Gold-Silver ratio is still in an uptrend and ABOVE important support. As long as this remains the case, it is a bearish divergence to broad markets, commodities and yes, ironically, potentially gold stocks and silver.

Wrap Up

30 year yield back into the 'continuum'. Acute deflation fears averted for the moment. 10 year yield formed a nice bottom pattern. Must hold 2.2% to indicate further bull activity.

GSR especially, indicates that all of what is going on is counter trend. Until it is broken down, it bearishly diverges the rally. A correction in broads is needed and one wonders if the Fed may prompt it by pretending to be stewards of sound policy this week. Supports are noted and must hold for extended bull activity toward or into new year. This is the preferred scenario for now.

NOTE: Wife just suggested friends closer to Boston who may have power. If so, will bring laptop and send from there. Meanwhile, I wanted to get this quickie out.

Regards, Gary

Edit (4:28) NFTRH159 was indeed sent to subscribers this morning, thanks to a friend's kind assistance. Blog readers, the gobbleDegook above is just a very simple machine gun style summary done in about 2 minutes. Consider the real thing my friends. It's got some good perspective in there. Oh, but wait until I get full internet access back. ;-)

NFTRH159 Out... Soon?

Dear subscribers, I have spent my day removing a pine tree from the inside of my house (thankfully, it hit an addition that can be closed off), chainsawing damaged trees that fell out of the sky all around the house and NOT BEING ABLE TO CONTACT YOU, thanks to some grumpyness that my mobile device experiences w/ the new Blogger posting interface.

Finally, I switched back to the old post editor and it works. I got 159 in the can this morning but an east coast Noreaster has knocked out everything in my area. Generators going, but Comcast is out. I went to my alternate office w/ 159 on a hard drive hoping to mail from there... no luck. Out.

So I will get the letter to you and upload it to the archive the minute I am able. It was 25 pages that helped me make sense to myself, if that makes any sense. :-) I felt like I had a gameplan by the Wrap Up. If you have any questions, pop me a mail. I can actually do that. I would have sent an email to the entire group but I could not figure out how to get my contacts list on this goofy device.

Anyway, keep on keepin' on. The market is making a lot of sense from technical and sentiment standpoints and I cannot wait to share my particular view of it with you.

Gary

Marines Storm Reddit After Occupy Oakland Shooting

Sent along by a friend who is a former Naval aviator and has shined light on some of my worst fears about how the military is used by politicians.  By my experience, there are few people as committed and passionate as Marines and the Oakland cops would appear to have messed with the wrong guy.

Marines Storm Reddit After Occupy Oakland Shooting of Scott Olson

Marines have been flocking to the social networking/aggregator site Reddit to voice their anger at the life-threatening injury inflicted on 24-year-old Iraqi war veteran Scott Olsen by Oakland police during the recent Occupy protests. Video showed Olsen go down after taking a tear gas canister to the head. As fellow protesters tried to assist him, police lobbed a flash grenade into their midst–right next to Olsen’s already fractured skull.
The picture above, submitted by Reddit user aburger, has generated well over 1,000 comments on the site–many from fellow Marines who are absolutely livid at the injury to one of their own by police.
Here’s one from Reddit user 0311kilo33:

As God is my witness. I will fight tooth and nail to restore the decency this country was founded upon. The politicians, banks and large corporations have ruined this country. I find it difficult to notice any sense of politeness on the streets anymore. But it goes farther. As a Marine and a citizen I am outraged. I am sick to death of the world my children are being raised in.

So I ask all of you, can you too sense the tipping point? When will enough be enough? If not now, when? I feel the problem is that the average Joe citizen is ignorant and comfortable. These, in addition to selfishness have become the standard for the majority of the population. As long as people are comfortable they remain silent. Well, I’m really fucking uncomfortable and I’m sick of seeing this sort of shit happening. The Occupy protests that are going on are our first glimmer of hope. If we can take this and move it further, get every lazy ass off their rocker and open their eyes; then maybe, just maybe we have a chance.

Semper Fi brothers, and remember who you are. Protectors of a great nation, not politicians or wealthy money grubbing bankers and the like. When it comes time, I know we’ll stand strong.

If online reaction is any indication, it’s not a stretch to think Olsen’s injury could be the start of something very big. We have a lot of military combat veterans in this country who haven’t been treated very well since they left the service. No job prospects. Inadequate medical coverage. If they take their anger offline and into the streets, the OWS movement will become an extremely potent, and WELL TRAINED force.

Me again... Just because I witnessed an unfocused hodgepodge at Occupy Boston last weekend, it does not mean that something historic and collective consciousness altering is not going to happen here.   I have been expecting social discord for many years (hence the firearms and other measures I had not seen myself ever taking until my financial awakening early last decade) and it appears it has now started.

These are very solemn and sad times.  On so many levels.  Reading stories like the above, with our supposedly oh so revered service people now engaged, the "comfortable" people the Marine quoted above speaks about are getting their wake up call.  What did the sign from OB say, 'America, this is your intervention'?

Watch the video at risk of ruining your whole weekend.

Edit (2:51) Here is Zero Hedge bringing even more to light.  If this kid dies 'Four Dead in Ohio' is going to go on steriods here.  Religious or not, pray (or meditate) for the kid... and for the country.

http://www.biiwii.blogspot.com
http://www.biiwii.com

'1360 Express' updated

SPX climbs above the heavy resistance at 1260 and thinks it can drive 100 points higher to targets.  In this scenario, the NDX would attain new highs and even the Russell 2000 small caps would retest the summer highs.

Will it be real or will it be Memorex?  Does it matter?  Bonus checks will be deposited and asset owners will be bailed out yet again; for the time being.

http://www.biiwii.blogspot.com
http://www.biiwii.com

Long Bond proxy TLT supports 'relief rally' case

It appears to be dangerous right now to read anything more than bear market relief into the current broad rebounds, impulsive though they are.  Risk to deflationists and bears became actualized as SPX loaded the 1360 target off the 'W' and as European ministers did what they had to do to keep this entire Ponzi scheme from unraveling.

The can is kicked down the road and US policy makers lay in wait to potentially go all 'me too' and go all in to keep the greed and desperation alive.  I have rarely seen a time when the risks were so pronounced to both sides of the bull/bear equation.

Or, have we transcended bulls and bears?  Are we so far off balance sheet now that this is just a giant arcade game - red and green lights flashing non stop - pretending to be an actual market?  It is no wonder more and more people are getting off the grid monetarily and otherwise.

OWS?  Come on now.  You have seen the videos.  This is trend following.  It is also revulsion, anger, desperation and yes, revolution.  But there is no curative message coming out OWS that I can see.  More like 'off with their heads' retribution.  Sadly, these are the chickens coming home to roost after years of rape and pillage by the financially privileged and elite.  The greed they protest against was very real and the damage inflicted on society very real.

Speaking of 'real', I will reel this post in because it started as a look at the T bond, nothing more.  I guess the point is, though the markets are gamed, run by black boxes and desperate manipulators, we are real people and this game is dead serious.  There is a market life and there is real life.  The gold stocks I follow are a means to successfully playing the game, as are other aspects of the markets.

But since day 1, the real message has been to get off the ever more dangerous financial grid, own what you own, off the debt and live happily.  I have no idea whether inflationary policy or deflationary collapse is going to carry the day beyond the current Wall Street Bonus Season extravaganza.  But just in case things go the wrong way (is there a right way?), people should have sound practices to fall back on.

More to come over time, because even I am not sure exactly what I am trying to say above.  :-(  I think sometimes I just get a little bored with being the dispassionate chart reader guy.  :-)


http://www.biiwii.blogspot.com
http://www.biiwii.com

Perspective on Gold Miners (NFTRH Update 10.19.11)

The technical case for gold stocks above broad stocks remains unbroken.  The fundamental case is quite bullish and the current rally is coming off of depressive gold bug sentiment.

Here is an email update sent to subscribers on October 19, along with an updated version of the chart that went with it.

It is so critical to have strength and perspective every step of the way.  The market does not care about you and in fact, makes its bones by trying to use you as fuel, or food.

'Perspective'... I write this word often, and I do so for a reason.

A tone seems to be rising among gold stock players that is becoming increasingly negative as the broad stock market out performs the gold stocks over the last several weeks.  This tone seems to come from a place that expects the gold sector to be somehow privileged and beyond the laws of TA, sentiment and over bought / over sold dynamics.

To help review, the attached chart shows HUI measured in SPX units in the top panel, along with gold (GLD) measured in euros (FXE) and Canada dollars (FXC).  This helps illustrate the theme we have been working since gold became massively over bought; namely, that the broad plays will probably out perform gold as the metal works off the unhealthy holders that momo'd it too far last summer.

Gold, despite its fundamental 'insurance' or 'value' proposition for the times has no divine right to just keep going up in service to the demands of the most gung ho gold bugs.  No, it is on a healthy technical correction to cure the momentum excess. 

Similarly, the gold stocks are being flogged and even despised in some corners as chronic under performers.  But the HUI-SPX ratio again shows that they remain in an uptrend vs. SPX, though it is a pained and unimpressive uptrend thus far.  This chart tells me that the risk vs. reward for premier gold stocks is much reduced in ratio to the formerly and dramatically over sold stock market. 

The nominal HUI remains above the big picture (monthly) support level (roughly 500 +/- 20) in a world full of markets that have broken beneath critical support.  Until this changes, the major technical condition is what it is, and that is unbroken.  Until such time as HUI drops below this level the case is unbroken. 

What is happening now is a correction and consolidation of previous bullish activity on gold and gold stocks and of bearish activity in broad markets.  Gold is correcting in relation to euros, Aussies, Loonies, etc. with a need to correct further.  This is why we have had an emphasis on significant cash levels ever since HUI 610 failed.  Current activity is draining spirits and we want to be strong during the process.

With nominal HUI at 524, support is intact.  What the sum of the above tells me is that if gold stocks are going to lose this support level - into a deflationary take down - the stock market is getting ready to drop even harder.  But that remains an "if".  Meanwhile, having plenty of cash helps one remain strong.

Regards,

Gary"

http://www.biiwii.blogspot.com
http://www.biiwii.com

Peter Schiff at OWS...

I once spoke to Peter on the phone.  I couldn't get a word in edge wise, LOL.  Here is an OWSer turning the tables on Schiff.  This world has sure gone crazy my friends.




Edit (4:08) Click the link in the video and watch the whole thing.  Schiff is able to get some good points across.  Edit (4:28) Oh my, the pro BIG government element of OWS is truly scary.  Frightening. Who the fuck do they think caused all these problems?  Some big fat pigs on Wall Street, yes.  But they were aided and abetted by Fed, Treasury, various administrations (from Clinton to Bush to Obama...).  This is apparently more screwed up than I originally thought.  Socialism, Unionization and Big Government?

http://www.biiwii.blogspot.com
http://www.biiwii.com

Copper Ceilings

The good doctor looks to 'W' up to resistance at 3.90 a pound. 

 









Meanwhile, the guys that dig it out of the ground will target a ceiling of their own.

Party on Garth.  This could get nice and ripe by the time a new bear opportunity comes about.

http://www.biiwii.blogspot.com
http://www.biiwii.com

Silver miner ETF more bullish still...

Baby 'W' heads for a second day above the neckline resistance and is above the moving averages.  I think I can I think I can...

http://www.biiwii.blogpsot.com
http://www.biiwii.com

European Union joins Wall St. in flipping the bird...

Attn: 'Bad cops' Plosser, Fisher & Bullard... attn: OWSers... attn: Tea Partyers... attn: Austerity Movement... attn: all savers and hard working people the world over...

SCREW YOU!

EU Sets 50% Greek Writedown, $1.4T in Rescue Fund

"There is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image, make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour, sit quietly and we will control all that you see and hear..."

With Tim Geithner hard in their ears the whole while, Europe's Ministers of Inflationary Excess have come to the rescue in sanitizing the Greek mess.  To make everyone feel real warm and fuzzy for the holidays, it comes at the dawn of Wall Street's bonus season (expect it to be a little less high profile this year) and bonus seasons for financial services people the world over.

We are on a rally, EFSF puts Europe to bed for a while, and best of all, the US Fed now holds the status of follower rather than leader, should it need to bail something out in the wake of Greece.  And speaking of Greece, might we think this is a precedent?  How about all the other leaks in the dike waiting to spring?  Oh wait, they are going to get "a commitment from Italy to do more to reduce its debt".  Ha ha ha.

Right in the light of day and in the face of OWS and the other US and global movements to stop the insanity of out of control government meddling in economic affairs, Europe does exactly that on a grand scale.  They would sustain the bull rally and give the impression that something is fixed.

In reality, they very likely just made the EU much weaker as the other weak links now have a precedent to look forward to.  Italy, Spain, Ireland?  Who's next at the free munny trough?  And the US, which has shown how its done since 2008, stands ready now to follow in the wake of Europe should any err... problems, spring up.

Jonathan and I were 'talking' in the darkest moments of 2008 about inflationary responses and his comment was "it's inflation all the way, baby".  That has stuck with me.  When he is not being poetic, he is very direct.

Gold getting dinged this morning because of its safe haven bid?  Well, most of the safe haven knee jerk numb nuts have been purged from the relic over the last several weeks.  Those fixated on the USD as the anti-market, get off that already.  The Euro just stepped up to the big leagues along with Uncle Buck.

We have a world of utter basket case paper currencies and the powerful clerks and assorted robots that supposedly steward them.  This is bond default and asset appreciation at all costs.  This is Wall Street (easy target, I know) and Brussels flipping the bird to the world and you'd better be on the right side of what they are preparing.


http://www.biiwii.blogspot.com
http://www.biiwii.com

Baby 'W' vs. Big Bad H&S (SIL)

I think I can I think I can... come on little feller!

http://www.biiwii.blogspot.com
http://www.biiwii.com

Canadian Venture (CDNX)... Bottom?

http://www.canadianinsider.com/index.php

There is a lot to like about the chart below for a bottom feeder.  A 62% Fib of the entire bull market out of 2008's destruction, with long term support at that Fib, along with the most over sold RSI since 2008.

For the gold explorers and junior miners in the index at least, an improved fundamental backdrop for gold mining does not hurt either.  And folks, fundamentals have improved during these last several months of economic angst.  It's the counter cycle after all.

As is now being well publicized around the internet, insiders are back on a net buying spree in the companies that comprise the TSX-V.  That sure can't hurt.  It is Tax Loss selling season after all, and these people know the drill.  Sell high and buy low when bag holding shareholders decide to give in and take losses against gains.

Remember when gold in the ground was being given away free and all you had to do was buy a company for its net cash or, comically, less?  Well, things are not quite as crazy now, but they are not that far off.

You either believe in deflation with a sincere heart and the patience of an elephant, or you don't.  I believe there is a continuum in play and until proven otherwise, I'll stick with that.  Signs are mounting that the pendulum is swinging, pending the sorting out of the Euro noise.

http://www.biiwii.blogspot.com
http://www.biiwii.com

"Windbag" likes gold...

The "old windbag" (not my descriptor, I know little of the guy; but that of a friend well known to this blog) has apparently done an about face on gold.


Gartman: EU Debt Plan to Hurt Currencies - Buy Gold in USD, GBP & EUR as "Is a Currency"

And you can buy gold in those currencies and store it in Zurich, London or NY by hitting the BullionVault graphic on the right side bar.  ;-)

http://www.biiwii.blogspot.com
http://www.biiwii.com

Big bad H&S top vs. little baby 'W' bottom...

The battle continues...

http://www.biiwii.blogspot.com
http://www.biiwii.com

Junk debt profanity

Say, do you want to know what this is?  This is Wall Street giving the finger to the OWS, to the Austerity Movement, to the 'bad cops' Plosser, Fisher and Bullard at the Fed and to anyone else who wants to get in the way of bonus season.  You have got to love the markets.

http://www.biiwii.blogspot.com
http://www.biiwii.com

Rut Roh... GSR the lone hold out against bulls

While other bear indicators like VIX and USD threaten to lose support, the GSR has stood alone in admonishment of a greedy bull parade.  GSR continues to look like a Bull Flag and as long as it does, it is a nagging problem.  Silver will likely out perform gold and the GSR will likely break down if a real party is getting started here.

http://www.biiwii.blogspot.com
http://www.biiwii.com

GoldiLox!

Well, not really.  But this is a necessary component to the bull tout. 

Inflation Peaking in US as Commodity Prices Tumble

It is also a necessary component of coming policy.  The poor herd is whipsawed over intermediate cycles between inflation hysteria and deflation hysteria.  It makes you wonder how conventional people ever make their way in these markets.  No wonder the markets are absolutely littered with day traders.

In reality, there is a big picture theme in play and it allows for plenty of swing room between its extremes, allowing patient investors and swing traders to reap gains, manage risk, preserve capital and set up to reap more gains.

You have got to love the markets... and all the b/s that attends them like the headline above.

Silver stocks at important juncture...

In concert with the question of what SPX will do at 1260, we might ask what will the Global X Silver Miner ETF do at the broken neckline?  Will the big bad H&S hold and kill these miners or will the little baby 'W' bottom dare to slay the big ugly bear pattern?

Everything not named Uncle Buck or GSR appears to be positively correlated at the moment.  All one market kind of thing.

http://www.biiwii.blogspot.com
http://www.biiwii.com

This is more like it... from Argonaut Gold

Unlike the pathetic JAG situation shown last week, where I put trust in a management team that had proven itself untrustworthy in the past (here again, I am HUMAN... oh so human), I have slept soundly holding core NFTRH position Argonaut Gold, run by the proven former Meridian team, and acquirer of a former NFTRH core item Pediment Gold.  It's all about management... and attainable ounces.

Argonaut Gold Increases M&I Resource at La Colorada to 1.1 Million Gold Ounces Up 76%

http://www.biiwii.blogspot.com
http://www.biiwii.com

Gold-Silver Ratio & HUI

At some point the gold miners are probably going to get in a positive correlation with the GSR which rises along with the 'real' price of gold, which in turn rises with general sector fundamentals as we constantly harp at in the newsletter.  But this positive correlation probably will not come until thorough punishment of the lazy thinkers in the commodity and inflation herd is complete.

Meanwhile, Huey remains a beneficiary of the now correcting GSR.

http://www.biiwii.blogspot.com
http://www.biiwii.com

Doctor Doctor, give me the news...

http://www.biiwii.blogspot.com
http://www.biiwii.com

More from OB

http://www.biiwii.blogspot.com

Here are the rest of the photos and down below, a few video clips.  Sorry for the horizontal on the first one.  I am not sure how that happened.  As I let this all settle in, my views have not changed.  I at least made an effort, in the middle of a working weekend, to get in there and see Occupy Boston for myself before making any further comment on the movement as a detached, abstracted blogger.

I was not altered in any way whatsoever.  Feedback has me thinking that there are a lot of people who really want this to be something other than 10 years too late, when it might have made a difference (as noted by one emailer).  I cannot help but think that this is trend following and maybe that is just how I am wired to think being a market guy.  I cannot help but wonder where the movement was when we were a society still happily living on the national credit card, hubris ever expanding and convenience the overarching theme.

The guy in the video previous to this post was out there nearly alone (with David Walker at the US GAO) in the wilderness 10 years ago, warning, imploring and through honest orientation virtually knowing something was terribly wrong.  There were the old veteran gold bugs I used to read over at Gold-Eagle, citing the work of the Austrians, led by von Mises.  Along came we bloggers and assorted other writers and speakers warning of the coming collapse of the system at the hands of years of abuse coming out of Wall Street, the government and the Federal Reserve.

In that we are still making all the same mistakes in obsessing on more inflationary QE (think about it, that is THE primary economic fundamental that conventional stock touts are hoping for) I suppose OB and especially OWS are finally trying to say ENOUGH!!  But I am just one person with one opinion, and that opinion is that the resistance should be against the big political parties that cater to very different constituencies (some of which I see represented @ OB - sorry liberals), a dysfunctional government that hears the voice of monied interests above all, and of course the source of that money; namely, the Corporatocracy which increasingly controls modern societies.

The '99%' are not represented at Occupy Boston in my opinion.  This is not what revolutionaries are going to want to hear, but the 99% really felt more like I don't know, maybe about 10% or so.  Where are the millions of people who work hard trying to make ends meet, do what they have to do and yet fall further behind due to the inflation born of money printing by the Fed/Congressional relationship, and any given Treasury Secretary's cozy relationship with powerful financial corporations?

The message is this - again, according to one tiny little blogger who has been writing about the process since 2004, and following it for 10+ years - the Federal Reserve, at the behest of an out of control government, has been finding ways to print money out of thin air in ever more creative ways to meet ever more hazardous moral hazards while the Wall Street banks acted as conduits (marking up their end every step of the way) to an unsuspecting public.

Ron Paul and David Walker were two people in government trying to wake the people up.  Various alternate media tried to wake people up.  The people would not wake up.  Now, after things became obviously screwed up, here came the Tea Party and now, here comes OWS.  People are pissed.  I get it.  But I continue to hold the opinion that this movement is going to fail if it cannot hone a consistent message.  OB is not OWS, the latter of which I have not personally witnessed.  So again, I cannot comment there.  But I know what I saw on Saturday, and it was not happening.  Not yet, anyway.  Not from my 2 hour snippet in time.

 

http://www.biiwii.blogspot.com
http://www.biiwii.com

NFTRH158 Out Now

Continuing this weekend's theme, #158 includes a few more words about Occupy Boston, which has absolutely nothing to do with the majority of this well-focused, if unspectacular letter.

"As you may have seen on the blog (http://biiwii.blogspot.com/2011/10/revolution-willnot-be-televised.html) I managed to squeeze in a visit to OB on Saturday. As you might also have noticed, I received some negative feedback on my reporting. Now, out in the blogging world, you can hear from all types – from the incredibly intelligent to the downright lunatic and scary. This gentleman is intelligent, thoughtful and also an NFTRH subscriber.

NFTRH subscribers pay me for my thoughts and I take that with the utmost seriousness because it is just an awesome thing to realize people might think highly enough of you to care that much about what you have to say.

Unfortunately in this case however, what appeared on the blog – complete with the
humor – is what I came away from OB with. Maybe I have been down in this hole for
too long and somewhat desensitized to what is going on out there in macro. I don’t
know. But I came away pretty much empty.

I went there not knowing what to expect, but hoping to become engaged and that is
simply not what happened. I was disappointed and just as I used to tell my wife how
alone I always felt as I carried the information (interpreted through my own distinctly
colored lens I suppose) that came from an economic consciousness raising, I felt alone
again yesterday.

Now, do I have some preordained right to the truth, to be right? No, not at all. But as a
reporter and a human with a certain belief system, I was not engaged. It was as simple as
that. Occupy Boston as currently formed, will probably not be taken very seriously in my
opinion. The messages were too varied and too mixed. This is no comment on OWS or
any other of the global occupations."

NFTRH158 Out now.

http://www.biiwii.blogspot.com
http://www.biiwii.com

The Revolution Will Not Be Televised...

 http://www.biiwii.blogspot.com

Edit 10/23/11 @ 6:09 AM:  The very first feedback I received on this post was from an intelligent and thoughtful reader who notes that "I don't see you talking at all" in response to my "what the eff are we talking about here?" at the end.  The mailer writes that it is all about conversing, asking questions and challenging the status quo and asks a question of his own about what I was hoping to find, the promised land?  He saw me pointing a finger and poking fun.

So here is my answer:  I wanted to find some of history.  I wanted to find something different.  I wanted to find someone talking about money printing and inflationary disenfranchisement.  That is what the whole Fed shtick was about in the video (I admit the helicopters that flew over the Fed had me thinking about making tin foil hat jokes and got me unfocused).  I did not want to find Kumbaya and bongos.  I suppose I wanted to find something more focused on a message of the '99%' being so many of us stuck in the middle of a triad of the Democrat machinery, the Republican machinery and the Corporate machinery.  With a side of Federal Reserve thrown in for good measure.

As for pointing a finger and making fun, I wish there was something to point a finger at.  I kept muted my views on Socialism and Unionization.  I let the signs pictured below, especially the first two, do the talking about things I care about.  In fact, the entire story is in the pictures and I am not saying much, I agree.  This is not about me talking and if it were, I would not have much to say because I have seen and heard everything I saw and heard yesterday before.

So, my point with this post is exactly what I thought I had already put across.  OB is not ready for prime time and in need of a focused message if it hopes to be taken seriously.  Now, my 2 hours may have missed something profound that will happen or has happened.  Maybe the whole thing is profound and not to be judged on a 2 hour snippet in time.  Maybe the kids organizing in the picture below were about to make history.  I don't know.  I just reported back - with some silliness I grant you - my impression.  Believe me, if my consciousness were altered in any way, I'd have reported it, instead of making funny captions below the photos.

Sad to say, Occupy Boston is not ready for prime time.  This is not to say there were not some good causes represented at OB aside from the pro-socialism, pro-union stuff.  But my view upon walking through the little tent city, hearing some sloganeering and the prerequisite bongos playing non-stop, is that this is a real disappointment; a jumbled hodgepodge of stuff heard a million times in the 60's, with some of it even being relevant to the corporate culture that increasingly intertwines itself with our daily lives.

Boston is either a giant step behind New York (as usual), or Chris Hedges hallucinated his thought provoking piece A Movement Too Big To Fail as he wrote about OWS.

An interlude:  A few weeks ago my friend Jonathan, whose brokerage shop is right in the middle of Manhattan, noted to me the cheery colors that New York's cutting edge fashionistas are wearing nowadays.  This in contrast to the drabbed out "Tom Joad look a likes" he noted back on 2006/07 well before the crash.  Flash to Boston's epic Head of the Charles Regatta and I have to tell you I have never seen so many people dressed in black out there by the banks of the River Charles.  Good old Boston, still stuck in a bear market mentality while NYC's fashionable elite are already projecting bullish times ahead. 

Back on message, as I approached the OB I was videoing myself (it is on the cutting room floor as this ain't about me) in front of Bank of America.  A security guard came running and waving out of a little guard shack telling me "No no, no camera here!"  "Why?" I asked, "I am only videoing myself talking." "No no, they do not want anyone to take pictures... they probably have YOU on video!"  "Oh okay, well thanks for the info" says I, walking away feeling like I am in the middle of some alternate world with Michael Moore as its only other occupant.

Next I came upon a group of Boston's finest - really big dudes with really shiny motorcycles all in a perfect line.  "Hi officers, do you mind if I get a photo?" Yes, barked the most important looking one.  Okay then, moving on... I am starting to think this OB must be really big because these guys are deployed on a side street outside of the occupation area, just in case.

So much for first impressions.

Here is a little video in front of the Boston Federal Reserve.  For some reason I felt more in my element hanging around at the Fed then I did at OB.  When I was a little kid, my dad was driving my sister and me down Storrow Drive and we came upon a herd of hippies crossing the road to the Hatch Shell for a concert.  I had my head out the window going 'moo, the cows are leaving' (like in the commercial from back then) and a hippie gave me the finger.  I never liked hippies.  So yeh, I felt more at home at the Fed than I did among the Socialist, Unionist, Marxist contingent of OB.

While I took more video from right inside OB, I think pictures will work better than bongos and slogans drilling away at your ears.

This is a sign I agree with, being a non DemoPublican myself.

And you know I agree with this one as well.

Yawn.

Doin' his own thing in his own time man, it's beautiful.  To paraphrase Easy Rider.

I actually think I could win an award for this photo.

You mean greed is not good? 

Not sure who he is, but he is obviously pretty important... and purple.

Same here bro.

Occupation can be taxing, and it can apparently be relaxing.

Gandhi and Doctor King were great men.

Tents, tents and more tents.

Yes it is, just like Capitalist Pig.  Well, that's two words but...

Power to the people.  Seriously I mean.

Young people organizing just off site.

But Chris Hedges said this has nothing to do with Democrats and unions and...

Like I said, there are some good points to be made here.

It's just people after all.  And every last one has the right to assembly, speech, etc.

Just as I have a right to...

end my day as I see fit.

I do not want to minimize the circumstance that drove some of these people here.  Corporate greed is after all, the reason I started doing this website and blog thing back in '04.  Corporate greed, screwed up government and yup, the Federal Reserve banking system.

I just feel that the Occupy Boston segment of the revolution is not nearly where it needs to be.  I am actually surprised there was not a 'Save the Whales' contingent.  And I do not make light of that because cruelty toward, and exploitation of such beautiful creatures actually breaks my heart.  But what the fuck are we talking about here?  Come on people... FOCUS!


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CoT Gold & Silver report hot off the presses...

And it is again bullish:

 
GOLD - COMMODITY EXCHANGE INC.                                       Code-088691
OPTION AND FUTURES COMBINED POSITIONS AS OF 10/18/11          |
--------------------------------------------------------------| NONREPORTABLE
      NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
  Long  | Short  |Spreads |  Long  | Short  |  Long  | Short  |  Long  | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 100 TROY OUNCES)                       OPEN INTEREST:      794,999
COMMITMENTS
 186,757   26,772  224,939  315,416  509,584  727,112  761,295   67,887   33,705

CHANGES FROM 10/11/11 (CHANGE IN OPEN INTEREST:    -11,728)
  -7,548      488   -2,787     -857  -10,668  -11,192  -12,967     -536    1,239

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
    23.5      3.4     28.3     39.7     64.1     91.5     95.8      8.5      4.2

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:      372)
     218       78      175       58       60      333      260

***

SILVER - COMMODITY EXCHANGE INC.                                     Code-084691
OPTION AND FUTURES COMBINED POSITIONS AS OF 10/18/11          |
--------------------------------------------------------------| NONREPORTABLE
      NON-COMMERCIAL      |   COMMERCIAL    |      TOTAL      |   POSITIONS
--------------------------|-----------------|-----------------|-----------------
  Long  | Short  |Spreads |  Long  | Short  |  Long  | Short  |  Long  | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 5,000 TROY OUNCES)                     OPEN INTEREST:      160,153
COMMITMENTS
  23,437    7,938   57,485   55,226   80,150  136,147  145,573   24,005   14,580

CHANGES FROM 10/11/11 (CHANGE IN OPEN INTEREST:      2,509)
  -1,478      434    1,654    2,362      -56    2,537    2,032      -28      477

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
    14.6      5.0     35.9     34.5     50.0     85.0     90.9     15.0      9.1

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS:      174)
      78       39       78       40       44      153      132

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Gold

The public now hates the fact that it bought into this gold scam.  "Damn, if only I could have held out and not gotten so emotional, I would have remained calm and let our dear leaders find a solution instead of buying into this bubble" says the public.

Real gold players know that the above is a necessary ingredient to preparing the ancient relic for the next leg in its bull market.  But a key question remains as to gold's technical status.  As we have noted all along (since the upside panic last summer) in NFTRH and on occasion here on the blog, gold has needed continued correction as measured in Euros, Loonies and to a lesser degree, Aussie Dollars. 

But what of its nominal price?  Well, if you care about gold's price from a daily, weekly or even monthly perspective, then you are set up for disappointment.  If you know the reasons that gold is rising as a long term barometer to the global financial events currently in play, you simply do not worry about the short term.

While gold can qualify for support at or above 1550 - a level that is reinforced by favorable public opinion and CoT data - going strictly by the technicals, the recommendation is to ignore the cheerleaders and realize that gold can easily decline to 1450, 1300 and even lower.  If you understand the desperation currently in play by powerful entities world wide, you also understand the ease with which this relatively small and relatively controllable market can be manipulated.

You also understand the intensifying value proposition of gold now a few years on from the previous intense buying opportunity.  Back on the chart, we note that the most recent drop in RSI to near 30 has the potential to end the correction.  But if the system remains in a continuing deflation 'event', it would be worthwhile to note the crash below RSI 30 that attended the last great deflationary event in 2008.  So do not rule out a decline to 1150 or even 1000.

Now, the herd (and not just the gold herd, mind you) will of course be sucking its thumb if 'disaster support' - AKA support from the 2008 destruction for most stock and asset markets - is approached.  I do not expect this to come about on this cycle, but it is on radar none the less. 

The chart leans bearish in my view.  Gold has certainly qualified for a healthy correction, but when thinking about the fury and hysteria of the Euro panic that drove gold too high, too fast into an upward channel buster, it helps to keep symmetry in mind; as in the market often punishes one mania (in this case, bullish) with an equal and opposite mania.  So, while I am going to manage 1450 and the channel bottom for now, I am also going to use plain old market experience to at least note the potential for continued punishment and lower levels to come about.

This chart introduces another indicator, the Stochastic RSI, which is an indicator based on an indicator.  The idea being that it is more sensitive to over bought and over sold levels.  While it has declined toward over sold (bottom yellow dot), a smoothing 5 day moving (top yellow dot) average implies it can become more over sold short term.

I realize that gold is rising strongly in pre-market this morning.  But as long as it remains under the top (yellow dotted) channel line and roughly the 1700 area, it is technically vulnerable.  So many stock markets - including my favored HUI Gold Bugs index - are at inflection points.  It would probably pay to watch what happens in gold for signs of what may be coming for the rest of the asset spectrum with regard to whether or not the deflation event is finishing up as a mini event or has more kick left in it for potential maxi destruction.

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Commodity Free Week at EWI

Now, I'd have much preferred some direct Prechter because I don't think that deflationary err... issues are quite ready to abate

Regardless, EWI has a 'free week' going with commodities from now through noon, next Thursday.  I recommend you check it out because the service is spam free and not at all clingy when signing up for the free Club EWI, which I did long ago. And actually when you think about it, commodities - especially Doctor Copper - are pretty important when looking for indications toward inflation or deflation and ultimately, broad stock market direction.

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Attn: New NFTRH subscriber Carsten E.

Please unblock gt @ biiwii.com from your mail service's spam settings.  The welcoming email was bounced back to me.  A copy of an email update from this morning along with a separate welcoming email (w/ NFTRH157 attached) appear to have been successfully sent from nftrh1 @ gmail.  Thank you.

HUI, SPX, VIX, GSR & USD all in one handy chart

I got so busy today I almost forgot I had a blog to keep up with.  The busyness started first thing this morning in working up a lot of viewpoints to go with this chart for an NFTRH email update.  Here for the blog's consideration is the stand-alone chart, which on its own can be used to derive a lot of meaning by readers. 

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Fear not gold bugs

As of yesterday, the public was in fear of the relic.  Therefore, on a risk vs. reward basis - assuming you are not a casino patron dazzled by daily red and green lights - you should not be.

Gold Public Opinion (10.18.11) from sentimentrader.com

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HUI - Coming down to the wire

There are lots of dynamics in play, with broad markets and commodities coming off hysterically over sold while gold continues to take a healthy dump off hysterically over bought.  Gold in ratio to certain headline currencies needs to continue working off the excess.  It is a process and in the markets, processes are seldom comfortable.

Meanwhile, Huey is in a process of its own; and that would be the process of determining whether today's would be Reverse Symmetrical Triangle will meet a similar fate as the H&S (AKA Crown of Thorns) from '07/'08.  A baby crown of thorns was ID'd long ago in 2007.  It morphed into a monster and the resultant damage went deeper than even I thought it would.  But it formed in alignment with very real macro fundamental considerations, which are absent today.

Consideration must be given to the fact that the 'real' price of gold has been doing something quite different in the multi-year run up to this (rev sym-tri) pattern than it it did in the multi-year run up to its pointy headed bro from the previous cycle.  But who needs rational thought when we've got a whole wide stock market full of blow horns and noise makers?

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JAG (Jerks Against Gary)

Pertaining to the comments on the previous post, here is exhibit A illustrating why precious metals miners are on average a tough group behind whom to throw your investment dollars.  The inept management at Jaguar Mining have long since proven that they are prime violators of OPUD (over promise, under deliver) and for all the world to see, the blogger - making like a rookie - gets burned by these people.

I actually went against the opinion of my man in LatAm over at IKN and thought that maybe this time would be THE turnaround.  Not to be.  Mr. Titcomb and fellow 'management' clowns are still what they are and probably will always be; toxic to their investors.

One again, I like to show a few of the excellent wins on occasion so in the interest of disclosure... and balance, here is another total screw up by me.  Come subscribe to my newsletter.  You too can get opportunities like this!  :-(

All of this said, there is quality (or well vetted perceived quality)  and there is speculation.  This piece of crap was a speculation gone wrong.  I will not personalize it, but I have a mind to drive up there to Concord, NH and give the chronic under performer Titcomb a lesson in management.

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Silver Wheaton back below neckline

It is charts like this that make the viewer question a near term case for silver (and yes, I know the CoT is wildly bullish).  SLW is an excellent company and a great way to invest in silver, assuming one is bullish.  This chart is however, not bullish with the price below the neckline.

Edit (5:18) Upon seeing the silver and gold reversals, I actually bought this one today along with RGLD in my conservative account.  Edit (2:19 on 10/19)  Trade closed unsuccessfully.  Tough market, cash good.

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Important support zone for Huey

Price and RSI support at current levels are important to the short term bull case.  I am positioned for the times, in that sweet area where I welcome up or down.  That is because I believe the time of opportunity is approaching in this noxious market of discontent.

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More thoughts on OWS...

Chris Hedges has stirred up a mini epiphany in the blogger, especially considering the endless war-making that is employed in the name of corporate gain.  I am always against war, whether it is apparently 'justified' or not.  I hate war.  I supposed that sometimes it is necessary, but only to a tiny fraction of the scale to which it is systematically carried out.

A couple more articles for your consideration can be found here http://www.biiwii.com/analysis.htm.  The first, 'Going Apeshit' by James Howard Kunstler, shows the situation in cartoon-like fashion (a huge compliment, btw) as only Kunstler can.  He also shines a light on President Obama's superficial attempt to align himself with OWS for political gain.

Then there is the boring stuff, compliments of Bill Bonner entitled 'The Real Problem the Wall Street Occupiers Have Missed'.  This piece assigns blame where it belongs, with the corrupt monetary system under which we toil; an out of control system of credit creation (inflation) and equal and opposite impoverishment.  Gold is a monetary revolution you know.

I realize I have trained myself - in the context of this blog and my financial market dealings in general - to be something of a robot; uncaring, unaffected and unbiased.  But I am a human too.  I first reacted against corporate evil-making by writing - a lot.  Then I went to the 'dark side' and commercialized.  I am no hippie, after all.  I am a member of the capitalist, free enterprise community.

But I like to think I keep a moral compass in good working order at all times and right now, my compass is indicating that I should get off the high horse and get with what is going on here.  The market needs cold, uncaring analysis.  I can and will do that.  But I think I am going to get my ass out of cyber space and into Boston so that I can view OWS without abstraction.


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A Movement Too Big To Fail

Thanks to subscriber David for sending this to me.  My opinion is changing here.

A Movement Too Big To Fail

"There is no danger that the protesters who have occupied squares, parks and plazas across the nation in defiance of the corporate state will be co-opted by the Democratic Party or groups like MoveOn. The faux liberal reformers, whose abject failure to stand up for the rights of the poor and the working class, have signed on to this movement because they fear becoming irrelevant. Union leaders, who pull down salaries five times that of the rank and file as they bargain away rights and benefits, know the foundations are shaking. So do Democratic politicians from Barack Obama to Nancy Pelosi. So do the array of “liberal” groups and institutions, including the press, that have worked to funnel discontented voters back into the swamp of electoral politics and mocked those who called for profound structural reform."...

"The Occupy Wall Street movement, like all radical movements, has obliterated the narrow political parameters. It proposes something new. It will not make concessions with corrupt systems of corporate power. It holds fast to moral imperatives regardless of the cost. It confronts authority out of a sense of responsibility. It is not interested in formal positions of power. It is not seeking office. It is not trying to get people to vote. It has no resources. It can’t carry suitcases of money to congressional offices or run millions of dollars of advertisements. All it can do is ask us to use our bodies and voices, often at personal risk, to fight back. It has no other way of defying the corporate state. This rebellion creates a real community instead of a managed or virtual one. It affirms our dignity. It permits us to become free and independent human beings."

Gold vs. Currency

Here is an old chart I used to use in NFTRH as we confidently managed the real bull market in gold, as was qualified by the relic's bull market in all major currencies.  Gold got a little too frisky and that is being worked off now, bringing out the "gold is a bubble" crowd that just cannot wait to be proven right.  It's not a bubble spanky, it's a barometer; and not just in USD.

The various markups on the chart apply to analysis I was doing at the time (August time frame).  It is presented here simply to offer a calm view of things during a noisy time.  Does gold look unhealthy in any of the currencies?  I didn't think so.

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