Everything feeling good this morning and all systems go for a green day - unless, of course, Merkel talks to the press.
Especially impressed with the bounceback in copper up $.15 to $3.21. Good chance yesterday was a retest of the October 1st lows (which also lined up pretty nicely with last summer's lows).
Now you could say prices are turning down in advance of earnings in the same way they turned up in advance of earnings in 2009, but in 2007, earnings and stock prices turned down in unison.
Just another data point for the huge wall of worry out there now.
2nd - there's only so many times i can talk about CSTR before pissing you guys off.
just got back from the gym and was running on a treadmill next to an 80 year old guy that was in better shape than me and running at about the same speed as me. Screw the nonsense in the media about Greece, I'd rather take my cues from a guy like that.
Wow... Looks like I lucked out with my November DB puts once again, closing them yesterday as DB crossed $36 on the way up.
Having said that, I'll start scaling into January DB puts if DB crosses $40, since Greece will likely default before January regardless of the deal struck in Europe next week...
I also decided to be more prudent with buy orders right now, since I am slightly in the margin right now and I have used up all of my "bailout funds" (credit card checks). So I cancelled the sell to open limit order for AUMN puts and left only a smaller buy to open order for AUMN calls.
"Now you could say prices are turning down in advance of earnings in the same way they turned up in advance of earnings in 2009"
So one might conclude stimulus did have a positive effect, aside from the ill effect of pulling demand from the future?
I don't think tax revenues ever really recovered though, the federal debt has only increased?
And now I hear whispers of plans the FED may resume buying MBS's, I assume that means from banks and any insiders who front-ran the plan, should it materialize?
Even though I don't want to enter new long-term buy and hold positions, I can use my margin buying power for trading, right? So I just bought 500 shares of AUMN at $7.37 and placed a sell stop limit at $7.15/$7.10, just below yesterday's low. If that low holds, then it will be a higher low, and hence a higher high might easily follow for AUMN, bringing it up to $10.
gold is definitely exhibiting bearish characteristics. now it can't seem to hold opening pops. that spells doom for all thinks metal in my opinion, at least for the time being.
TOF - Yes, I consider metals(from a commodities perspective) a leading indicator and right now copper action is even more important than gold(real money) b/c gold remains overpriced in comparison to both copper and WTIC but these two laggards are beginning to close the gap. This began to occur when the correlation went negative. A return to positive correlation of gold with commodities is considered a positive indicator.
ie: A gold:copper ratio in the 500's is an economical alarm bell.
Guys, stop that #$%^& about gold. It will keep going up in a straight line because the debt/GDP ratio in US will keep growing in a straight line. The economically sensitive commodities (copper, oil) will not keep up with gold, because the US economy will remain suppressed for years. It is just that simple.
David - "The economically sensitive commodities (copper, oil) will not keep up with gold"
That's quite possible and more than likely probable, my only point is that a negative correlation is a sign of economic trouble and recently the correlation has turned positive.
If you consider gold as the center of the monetary universe, with everything else of value rotating around it in an elliptical orbit, you might find this correlation trajectory interesting:
Silver - With the caveat that the gold:copper ratio doesn't elevate further but continues trending downward, there's a fair chance silver will remain in a range between $30.48 to $32.38
Additionally, caveat applicable: Bias for gold, although still overpriced in relationship to copper by ~$260 (3%), is in the same direction as copper, which is up.
Unless progress towards addressing the financial situation in Europe is resolved soon, we may not reach our targeted $2000 gold by Thanksgiving, if at all.
I also sense that silver will return to more than $34.48 once the Au:Cu ratio begins to approach 400lb/oz. It just stands to reason based on previous price observation.
Silver should look out below (target ~$19, next strong support) if this ratio begins inching back up.
Of course if all confidence in dollar is lost, answer is "E", none of the above. ;)
"my only point is that a negative correlation is a sign of economic trouble and recently the correlation has turned positive."
We are now all buy-and-hold investors here, right? For such investors, over the time horizon of several years, the correlation between all commodities will be positive, because ALL commodities will keep going up as the amount of paper money relative to real goods and services will keep increasing in the whole world.
Bought my straddle today, the SPY DEC 124 strike for $10.73, before I read CP's comment about the FEB buying MBS again. Ben has laid low for a bit and I guess it's time for him to come back out with a QE3 plan.
So if the EU resolves anything at all on Sunday AND you get Ben hinting at QE3, we'll probably have the monster of all rallies. Maybe that's what Ben is waiting for some EU cheer before he tries real hard to push it through?
A rally will bring in the volatility and just kill my straddle but at least it won't go to 0. I'm guessing it will be close to flat if we rally up to the SPY 128 area in the next 2 weeks.
Mark, I'll be sending you some reading material, I just have to scan it first. Time to go get the kids.
My CSCO and FCX are both underwater and I'm not selling till they at least get back to break even. That makes me a "buy and hold more than I planned on" kind of guy.
I agree with CP. I think Gold is overpriced relative to all the other metals and should fall here back into traditional ratio's.
That can either be accomplished by gold coming down or other metals going up. Last time I checked gold price was over platinum as well which is also a very rare occurrence.
BB - Precisely, in order for gold to move up, it's my observation that copper must also move up. The first requirement in the path to resuming an upward trend involves establishing a positive correlation between oil/copper/gold and otherwise, a majority of commodities short of a few exceptions.
sorry i'm partial to it b/c i went to school at Lehigh University, an hr north of Philly. that's all we drank if we had the money to splurge on expensive beers since its a local beer.
Everything feeling good this morning and all systems go for a green day - unless, of course, Merkel talks to the press.
ReplyDeleteEspecially impressed with the bounceback in copper up $.15 to $3.21. Good chance yesterday was a retest of the October 1st lows (which also lined up pretty nicely with last summer's lows).
Another reason why CSTR may be turning into a buy and hold for me:
ReplyDeletehttp://216.105.249.165/Mobile/news?id=436885977
Let's kick some ass, boys.
ReplyDeleteEurope is totally green in a big way, I guess it was only a matter of time?
ReplyDeleteStill, I'm a little annoyed I didn't get the memo! Or, did I?
GE- As usual, the companies with good earnings/guidance get punished on the day they announce.
ReplyDeleteGE - They can't let us begin to think we understand, lest we begin to suspect.
ReplyDeleteNice Chart showing the divergence in earnings and stock prices this year:
ReplyDeletehttp://abnormalreturns.com/thursday-links-justify-your-fees/
Now you could say prices are turning down in advance of earnings in the same way they turned up in advance of earnings in 2009, but in 2007, earnings and stock prices turned down in unison.
Just another data point for the huge wall of worry out there now.
Pretty quiet on the blog for a day like this. Has everyone been converted to buy-and-hold?
ReplyDelete2nd - there's only so many times i can talk about CSTR before pissing you guys off.
ReplyDeletejust got back from the gym and was running on a treadmill next to an 80 year old guy that was in better shape than me and running at about the same speed as me. Screw the nonsense in the media about Greece, I'd rather take my cues from a guy like that.
tof - How much is he drinking and what brand?? :-)
ReplyDeleteit's gotta be scotch kyle.
ReplyDeleteThen he's probably a 100 year old guy, and just looks like he's 80.
ReplyDeleteWow... Looks like I lucked out with my November DB puts once again, closing them yesterday as DB crossed $36 on the way up.
ReplyDeleteHaving said that, I'll start scaling into January DB puts if DB crosses $40, since Greece will likely default before January regardless of the deal struck in Europe next week...
I also decided to be more prudent with buy orders right now, since I am slightly in the margin right now and I have used up all of my "bailout funds" (credit card checks). So I cancelled the sell to open limit order for AUMN puts and left only a smaller buy to open order for AUMN calls.
ReplyDelete"Now you could say prices are turning down in advance of earnings in the same way they turned up in advance of earnings in 2009"
ReplyDeleteSo one might conclude stimulus did have a positive effect, aside from the ill effect of pulling demand from the future?
I don't think tax revenues ever really recovered though, the federal debt has only increased?
And now I hear whispers of plans the FED may resume buying MBS's, I assume that means from banks and any insiders who front-ran the plan, should it materialize?
Even though I don't want to enter new long-term buy and hold positions, I can use my margin buying power for trading, right? So I just bought 500 shares of AUMN at $7.37 and placed a sell stop limit at $7.15/$7.10, just below yesterday's low. If that low holds, then it will be a higher low, and hence a higher high might easily follow for AUMN, bringing it up to $10.
ReplyDeletegold is definitely exhibiting bearish characteristics. now it can't seem to hold opening pops. that spells doom for all thinks metal in my opinion, at least for the time being.
ReplyDelete$USD making the up-turn...
ReplyDeletehttp://finviz.com/futures_charts.ashx?t=DX&p=m5
$SPX: 1228.74 = Fib(61.8%, 1576.09, 666.79) very close
TOF - Yes, I consider metals(from a commodities perspective) a leading indicator and right now copper action is even more important than gold(real money) b/c gold remains overpriced in comparison to both copper and WTIC but these two laggards are beginning to close the gap. This began to occur when the correlation went negative. A return to positive correlation of gold with commodities is considered a positive indicator.
ReplyDeleteie: A gold:copper ratio in the 500's is an economical alarm bell.
Here's a chart, I think you want to see this move back to ~400lb/oz:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$gold:$copper&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
Guys, stop that #$%^& about gold. It will keep going up in a straight line because the debt/GDP ratio in US will keep growing in a straight line. The economically sensitive commodities (copper, oil) will not keep up with gold, because the US economy will remain suppressed for years. It is just that simple.
ReplyDeleteCome on, bulls- let's drive this sucker up into the close.
ReplyDeleteDavid - "The economically sensitive commodities (copper, oil) will not keep up with gold"
ReplyDeleteThat's quite possible and more than likely probable, my only point is that a negative correlation is a sign of economic trouble and recently the correlation has turned positive.
If you consider gold as the center of the monetary universe, with everything else of value rotating around it in an elliptical orbit, you might find this correlation trajectory interesting:
http://3.bp.blogspot.com/-tzkojNeZ584/TpWrjxEE8VI/AAAAAAAAEGQ/NbmxuVlnrN0/s400/Au%2B-%2BCu%2Brho%2B%252810-12-2012%2529%2B660W.jpg
CP- Don't let that red legged chicken ---- up the close.
ReplyDeleteTell him I want to see +300. No, make that 300+.
ReplyDeleteSilver - With the caveat that the gold:copper ratio doesn't elevate further but continues trending downward, there's a fair chance silver will remain in a range between $30.48 to $32.38
ReplyDeleteAdditionally, caveat applicable: Bias for gold, although still overpriced in relationship to copper by ~$260 (3%), is in the same direction as copper, which is up.
Unless progress towards addressing the financial situation in Europe is resolved soon, we may not reach our targeted $2000 gold by Thanksgiving, if at all.
I also sense that silver will return to more than $34.48 once the Au:Cu ratio begins to approach 400lb/oz. It just stands to reason based on previous price observation.
ReplyDeleteSilver should look out below (target ~$19, next strong support) if this ratio begins inching back up.
Of course if all confidence in dollar is lost, answer is "E", none of the above. ;)
Way to go, CP.
ReplyDeleteI plan to crack open the first Duvel at exactly 330 pm.
ReplyDelete2nd - I've got my fingers crossed the red legged chicken has some sharp spurs! ;)
ReplyDeleteGhadaffi - Wonder where his gold disappeared to?
ReplyDelete"my only point is that a negative correlation is a sign of economic trouble and recently the correlation has turned positive."
ReplyDeleteWe are now all buy-and-hold investors here, right? For such investors, over the time horizon of several years, the correlation between all commodities will be positive, because ALL commodities will keep going up as the amount of paper money relative to real goods and services will keep increasing in the whole world.
"We are now all buy-and-hold investors here, right?"
ReplyDeleteWHAT??? OH HELL NO!!!! Are U CRAZY????
Have I Dialed into the wrong channel??
This is 'Trading Topics' Isn't it???
Bought my straddle today, the SPY DEC 124 strike for $10.73, before I read CP's comment about the FEB buying MBS again. Ben has laid low for a bit and I guess it's time for him to come back out with a QE3 plan.
ReplyDeleteSo if the EU resolves anything at all on Sunday AND you get Ben hinting at QE3, we'll probably have the monster of all rallies. Maybe that's what Ben is waiting for some EU cheer before he tries real hard to push it through?
A rally will bring in the volatility and just kill my straddle but at least it won't go to 0. I'm guessing it will be close to flat if we rally up to the SPY 128 area in the next 2 weeks.
Mark, I'll be sending you some reading material, I just have to scan it first. Time to go get the kids.
My CSCO and FCX are both underwater and I'm not selling till they at least get back to break even. That makes me a "buy and hold more than I planned on" kind of guy.
ReplyDeleteI agree with CP. I think Gold is overpriced relative to all the other metals and should fall here back into traditional ratio's.
ReplyDeleteThat can either be accomplished by gold coming down or other metals going up. Last time I checked gold price was over platinum as well which is also a very rare occurrence.
I for one am trying to trade, don't count me as a buy and holder. Climbing my way out of a little hole, tip toeing through a minefield over here.
ReplyDeletecp -- U and me both Bubba... and 'minefield' is just about right...
ReplyDeleteBB - Precisely, in order for gold to move up, it's my observation that copper must also move up. The first requirement in the path to resuming an upward trend involves establishing a positive correlation between oil/copper/gold and otherwise, a majority of commodities short of a few exceptions.
ReplyDeleteIs it lame that I'm drinking a bud light lime and I actually like it?
ReplyDeleteI like the lime idea in the case of lighter beers. It's especially good in a Corona.
ReplyDeleteWhen was the last time you tried a dark beer, I like Yingling Black&Tan.
Another bullish headline.
ReplyDeleteUS Set to Unveil New Relief Plan for Homeowners
http://www.cnbc.com/id/44994333
Had one of my favourite beers with dinner - Pilsner Urquell - full-flavoured Czech beer.
ReplyDeleteLove to go Beer-hoping in Prague come time.
ummm CP get it right man...it's Yuengling!
ReplyDeletesorry i'm partial to it b/c i went to school at Lehigh University, an hr north of Philly. that's all we drank if we had the money to splurge on expensive beers since its a local beer.
new post
ReplyDelete