http://www.marketwatch.com/story/american-privilege-rots-an-empire-from-within-2011-12-11?link=MW_home_latest_news
I clicked on the above link out of curiosity, and ended up fascinated with what appears to be a 'spot on' prognosis of our socioeconomic trajectory.
'A rising empire rewards people who contribute to its growth and invest in its future. The empire’s decline begins when certain members of society are over-rewarded by means of privileges, and the empire’s money is wasted on outdated endeavors.'
Kyle - Yes, the Cognac... I'll give that one a rest.
ReplyDeleteJump Discontinuities - Good point, a change detection problem. I was thinking in terms of attempting to describe a disturbance response, as in a step function, and then see if there are any patterns or series of patterns.
Maybe someday I'll finally get serious about putting a pencil on it, although I realize the thought isn't a unique one, nor would be the attempt. It's this nagging feeling I get leading me to believe what I'm witnessing is contrived as thus I might be able to work out an approximate expression, or set of expressions.
2nd - That passage sounds like something I might anticipate reading in a history book concerning the rise and fall of the Roman Empire.
ReplyDelete"The empire’s decline begins when certain members of society are over-rewarded by means of privileges"
ReplyDeleteThe dregs of society, misplaced incentive (I talk about this all the time, you know my take well) and huge debt.
So let's see if more "unjust" reward is coming our way, and what form it takes, can we identify it?
When's that next debt-ceiling increase, remember last one came close to default and we were hearing stories about military soldiers who may not receive their pay, etc...
Step Detection:
ReplyDeletehttp://en.wikipedia.org/wiki/Step_detection
2nd i read that story also and Agree with the premises, but seen no cure. Maybe chemotherapy.
ReplyDeleteTZA to the curb at 27.42 before coffee. I'll take the 3%.
ReplyDeleterb- Chemotherapy? I like that. At the very least, the cure will involve mucho retching and hair loss.
ReplyDeleteDamn 2nd. Were you the first trade of the morning?
ReplyDeleteI'm watching Bloomberg. They have Barton Biggs on, kind of calling him out for his call a few months ago saying we might be going lower than the 2010 lows and possibly even the 2009 lows...he's now saying he didn't call that, just that that was a possibility.
ReplyDeleteWhy do they care what Barton Biggs says about stocks? Over the past 4 years I honestly can't remember a guy that has been more wrong.
tof- Not by a long shot. TZA premarket volume was already 80k by the time I placed my trade.
ReplyDeleteRe Biggs- Exactly. These guys got into the profession 50 years ago, built their reps during a no-brainer 1982-2000 bull, and now sqeeze what they can out of Hollywood Squares in their declining years.
ReplyDeleteBarton! Wasn't your call for SPX 1000?
ReplyDeleteShucks, Peter. At my age, my mind doesn't wander back that far.
(Canned laughs)
Well, where do we end the year?
On December 31.
(More canned laughs)
What a bunch of freaking squares.
ReplyDeleteNow TZA is bidding 27.86. I admit to considering another trade at 27.50- didn't have the guts.
ReplyDelete27.93
ReplyDeleteThings could be worse. I could the guy who decided the EOD ramp on Friday was bullish, and jumped back in.
ReplyDeleteTwenty- ----ing eight oh one? Can't win with that POS. She gets you coming and going.
ReplyDeleteMan if we bounce right back again today I will officially declare myself disgusted.
ReplyDeleteSome people were mislead Friday, into thinking the ECB had agreed to buy bonds, or bunds, or some such nonsense. That enthusiasm carried into Asia for some reason?
ReplyDeleteWe've been told, "NO QE" here as well, I guess the banks already sold most, or are selling short, in retaliation for the apparent global decision not to print.
Wonder where all the debt goes, b/c it won't be easy paying it off once the economy is crashed.
Bankers are as good or better at squeezing than the IRS.
More from our friend Twiggs-
ReplyDeletehttp://www.incrediblecharts.com/tradingdiary/2011-12-12-markets.php
Along with commentary by our blogging buddies:
ReplyDeleteRe: Twiggs - Shanghai breaking primary support
Submitted by jack black (2001 comments) on Mon, 12/12/2011 - 09:03 #101776 (in reply to #101772)
Looks like things are not as good in China as the (communist) government wanted us to believe.
Now, will USA economy decouple from the rest of the world? Hint: rhetoric question.
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Re: Twiggs - Shanghai breaking primary support
Submitted by Bill Cara (3178 comments) on Mon, 12/12/2011 - 09:05 #101777 (in reply to #101772)
Les,
Let's not introduce the ridiculous here. Twigg on the one hand gives support and resistance levels that are often miles apart, resulting in minimal help. Now he says the Shanghai support was at 3000 and the close was 2291.54. That was a technical violation (of his determination of the support level) by a minuscule -0.24%. Did that deserve a headline from him or is he selling us his lemonade?
Maybe Shanghai drops further here. But it's already down -25% from highs of late April, so I don't need to be told today that an analyst's ruler is indicating a primary bear in China.
Dollar - Mega resistance at 79.50, wonder if it EVER gets pushed past 80, or someone's keeping that from happening?
ReplyDeleteSVM - Another whole dollar to go before hitting the 52wk low again, what's taking so long?
ReplyDeleteEyes on SLW, down -4%.
ReplyDeleteSLW down close to -5%.
ReplyDeleteAnd where's that sub-$30 silver, huh? Oil's $98 man, tell me where's the sell off?
ReplyDeleteMaybe, just maybe, these can't resolve to the downside until after certain interests in Persia are finalized?
Markets weighed down by warnings by Moody's re Eurozone + Intel warning re Q4 earnings.
ReplyDeleteI still think we have more upside room before any selloff commences (if it does). The series of lower highs since Oct is too obvious of a reason to be bearish. Even if we go lower we need to screw with the bears some more first
ReplyDeleteOkay, now we test the false breakout theory for gold... I suspect some folks don't receive the event in quite the way they anticipate.
ReplyDeleteNot looking good, guys.
ReplyDeleteKeep in mind that trading includes 'cash' as an option.
ReplyDeletedon't sweat the selloffs...just keep those stocks you like in mind in case panic settles in
ReplyDeleteAUMN - David, those reports on El Quevar Argentina seem to indicate some monster size veins...
ReplyDeleteWhat we have here will be the first of the 'double down' plays by traders who bought on last Thursday's sell off. If/when it fails, the selling will accelerate as they read the writing on the wall and switch to looking for lower entry prices.
ReplyDeleteAUMN - Risk assessment:
ReplyDeletehttp://www.24hgold.com/english/assetvalue.aspx?id=4894B1670&market=AUMN
Bidding AUMN 6.06/.05... 6K shares.
ReplyDeletei wonder if the euro banks are really selling their gold?
ReplyDeleteright about now i'm glald i took my losses on CF, I still like the company though so now I'm thinking about selling cash secured puts 125-135 area, thinking about it is the operative phrase
ReplyDeleteGMO - Risk assessment: (Country risk very high)
ReplyDeletehttp://www.24hgold.com/english/assetvalue.aspx?id=4894B1670&market=gmo
Take a look at the post 1987 crash...there was a series of lower lows for several months after the initial rally topped out. I bet there was a large number of people shorting the market after a "break" of lows.
ReplyDeletePer Katie Stockton on Buzz and Banter
ReplyDelete"we believe intraday momentum may turn negative this week, giving way to a shallow pullback that leaves resistance intact....we recommend adding short exposure to cyclical stocks. Our bias for early 2012 is bearish, primarily based on the loss of long-term momentum tha the market has suffered. Fortunately, we think the SPX will continue to outperform most global markets, regardless of its directions."
all spelling errors are mine. Lets see how her outlook turns out. I tend to gravitate to those that DON'T comment very often. What I don't see in the article is her resistance number.
on the 30 min chart, i show SPY resistance around 123.50, 123.65 was the low on 12/8/11 and 123.22 was the low on 11/30/11. By the way, 11/30/11 was opened with a big gap up from 11/29/11.
ReplyDeleteport > does she comment often? i've seen her mentioned on the TV/blogs several times over the past few months.
ReplyDeletewhat's up with NFLX?
Drill results:
ReplyDeleteAXU - 141oz silver/ton
AUMN - 1000oz silver/ton
I see a slight difference in those numbers....
I just read her on Buzz and banter and i don't recall her posting everyday. I know if I post it CP will remember it so we can think of this as sort of a log. Even though I'm bearish, I do keep in mind that some event like the Fed announcing something new and exciting and dollar bearish will probably give us a good multi week/month tradeable rally.
ReplyDeleteAUMN - Sorry, wrong, 1000gr/ton that would be 35.3oz/ton
ReplyDeleteSo no wonder AXU is in rally mode...
on Real Money, i read a Kass headline where he said he DOES NOT BELIEVE the rumor that AMZN is going to acquire NFLX. I can't read the full text but the headline seems pretty clear.
ReplyDeleteI'm watching the real money pro headlines to see Ken Goldberg's headlines. He was big time bearish when my subscription ran out last month.
SVM - Newly acquired property ore grade report is between 204-331 grams/ton, I believe.
ReplyDeletehttp://www.nytimes.com/2011/12/11/business/awakening-in-the-glow-of-a-bloomberg-terminal.html?_r=3&sq=kass&st=cse&adxnnl=1&scp=1&adxnnlx=1323705798-KVKGBBk4heRKH+19V6RaSg
ReplyDeleteI find this funny....don't traders catch on to the fact that just about every time they react to news they end up getting whipsawed and probably lose money? Why waste time worrying so much about this crap. It's not tradeable.
I got that link from Doug Kass' twitter account. I figured I would check out what the spastic traders are thinking about during this time. Can I get my 5 minutes back that I wasted reading the mindless dribble he posts about? I really hope people don't pay for his RealMoney Pro service.
ReplyDeleteBreaking news: I'm long we're getting a Santa Claus rally.
ReplyDeleteBreaking News: support broke. I'm short.
ReplyDeleteBreaking news: EU has come up with a plan to save itself. I'm long again.
ReplyDeleteteam, i agree, it's fine for the day traders and its exciting to think about catching a bottom or paying for lunch for a day but for me, I really have no business looking at anything but weekly and daily charts. It would only be luck if I were to catch a bottom.
ReplyDeleteI think the only exception to that would be stocks that you believe have such strong fundamentals that you would be buying on days like this, assuming you are not all in.
Breaking news: Statistical evidence shows that there is no such thing as a Santa Claus. And therefore no such thing as a Santa Claus rally.
ReplyDeleteFinal breaking news (the hook): Sign up for RealMoney Pro where you can get my breaking news for only $50 a month.
ReplyDeletei'll take my leave now
ReplyDeletehey gents. adding INTC here, my take is that the entire issue is directly related to HDD supplies and as such rev and gm should roar back in h1 2012. SIL works there and he's super upbeat, esp over the next 4 yrs, product dev pipeline is robust.
ReplyDeleteI'm just sitting here wondering when they make good on the threat of a devastating sell off.
ReplyDeleteI'll add if they can make good on their promise..., so far no banana. Show me.
TZOO is strong today. I think if GRPN can hold up at the valuation it currently has for the next 6 months, then TZOO will get bought out.
ReplyDeleteJust read in the news an opinion of a hedge fund manager that echoes my concerns over the weekend:
ReplyDelete“The European stopgap may not be successfully implemented. In order for this program to be successful, there’s going to have to be a lot of belt tightening. That means that the European economy is not going to do well at all. That would have negative impact on other countries around the globe.”
But today's sell-off, most likely, is simply because I started hoping on Friday that this OpEx week might be a good one, that $USD might finally break below 78 and AUMN might actually rise above $7. Instead, $USD stages a massive rally, GLD breaks its recent late-November low.
It's nice to see AUMN today to still outperform GDXJ though...
wow. I put two sell orders in on XWES today: 5k at $3.22 and 5k at $3.24. Both got bought up in one chunk. I wonder if I shouldn't be selling then.
ReplyDeleteGold lease rate charts:
ReplyDeletehttp://www.kitco.com/lease.chart.html
http://www.minyanville.com/businessmarkets/articles/market-home-construction-stock-market-price/12/12/2011/id/38339
ReplyDeleteMITK is very tempting here...Mark - talk me out of it please.
ReplyDeleteTOF -- no need to talk you out of anything. Risk diversification is the key to success (I have ignored it to my peril this year), and if you expect MITK to be higher a year from now, then do take a position in it. Not necessarily a large position, but taking a starter position definitely makes sense at this price, with a goal of increasing it gradually as/if MITK becomes even cheaper at some time in the future.
ReplyDeleteEven though $USD went up in a straight line since 8am ET, silver is flat over this time period, which is encouraging. People are not panicking out of it anymore...
ReplyDeleteGold is much lower than it was at 8am ET, to it looks like today's weakness in PMs is due to some large player selling gold (but not silver) as opposed to a broad-based panic in which all commodities get sold and silver leads gold to the downside on every time frame.
ReplyDeleteDavid - Thanks man and I hope your risk taking pays off. I think MITK is interesting here because, aside from all of the fundamental reasons for it, the entry point is interesting:
ReplyDeleteThe stock ran above the 200 DMA and is pulling back into the 200 DMA. I think a long entry point here with a stop around $7.4 would be a fairly low risk trade. I'm also thinking that if they do a Mobile Bill Pay deal, a deal of which they have been hinting at for a while would come before year end, then the stock will rally hard and clear out lots of shorts.
renewed my realmoney pro subscription based on teams glowing recommendation. i'm sure i'll go bankrupt now. it something aggravates you so much DON"T READ IT
ReplyDeletebot my T Dec 30 strike calls back for $.02 plus about $.02 per share in commission. Even though my market bias is down, I can only short these calls against stock. With the market being so fickle, I decided to close my Dec short call position in case we get another +450 day which will give me a chance to sell the Jan 30 calls.
Still looking for another position to put on with today's weakness. BAC is looking like a call option.
"large player selling gold"
ReplyDeleteYes, I believe Central Banks are leasing their gold, to be sold. Are they trying to raise dollars? I don't know the details, was hoping a self-professed industry veteran might produce a glimpse of insight on that as opposed to just remaining consistently wrong.
Been there, done that, took quite a while to climb out of the hole last time around!
"Yes, I believe Central Banks are leasing their gold, to be sold."
ReplyDeleteWhat will happen when the leases will expire and banks will have to buy gold so as to return it back to central banks?
alright screw it...I went long MITK at $8.09. I also sold about 1500 shs of NOIZ at $8.7 avg and more XWES at $3.21. Trimming my position in both.
ReplyDeleteport > shit sorry man i didn't realize you subscribe to it...I was only bagging on Doug Kass and thought that that was his newsletter. but now I looked at RealMoney Pro and see it's much more than that so now I look like an ass.
ReplyDeleteagain, my apologies. i like to make fun of Doug Kass from time to time.
team, i'm just messing with you, I have not renewed my subscription, yet. You are no more or less of an ass than the rest of us. You have to remember, I've been cussed out by some of the smartest guys in the room, even one that went to the federal pen. I bet they all still have more money than me.
ReplyDeleteDidn't post this real time cuz the 3 year old woke up from her nap.
bot 4 SPY dec 17th, 124/127 vertical call spread for $1.07, strictly for entertainment value. I'll sell if we get any kind of a pop over SPY 125 between now and Friday. On Friday, if we are safely below 127, i can sell the long calls and leave the short calls to expire. We'll see.
So far S&P futures have rebounded exactly to Thursday's lows, which was expected. What happens next is the key. If the futures turn down right now, then it will be very worrisome, as it will be a classical downtrend picture: rallies to previous support (now resistance) that get rejected there and drop to a new low.
ReplyDeleteinteresting, in Think Or Swim, with the SPY showing a close of 124.21, the Dec 17th 124 strike calls are showing implied volatiity of 21.36% and the puts are showing 31.53%. Still more fear of going down.
ReplyDeleteI'm still looking for some opportunities to sell short puts on things I want to own. AAPL held up well today around $391. I'd prefer selling A PUT, just one, with AAPL trading somewhere between 350-365ish.
"What will happen when the leases will expire and banks will have to buy gold so as to return it back to central banks?"
ReplyDeleteI don't have copy of the contracts, but rates went negative, meaning whomever leased to gold to sell was paid to lease it, and it looks like they may be able to buy it back now at a lower price.
Yes, it's all paper shuffling, maybe just turning over and over by rehypothication, the same dozen bars that 10's of thousands have claims on the same lot, thus the physical isn't deliverable. You want the physical delivery, we file bankruptcy and hypothecate your account, gold and all.
Theoretically, the lease(s) could be for eternity, and the supply could be infinite?
The weekly GLD chart still looks bullish to me. I think this is one to watch. I wouldn't buy it on a one day gap up though. I'd rather see something a little smoother.
ReplyDeleteActually The Street (TST) would probably make a good short here. Revenues falling year over year over year. Generally losing money. Also, Cramer preferring to spend his time on TV and Kass tweeting a lot of his trades.
ReplyDeleteThe risk is somebody big buys them, but I doubt that. Going to be tough to make money in the financial web site business in general. Even question mt $150 a year for the WSJ online.
BB, very interesting. I've noticed commentators dropping off when I had my subscription plus I was surprised to see Buzz and Banter offered free on both Etrade and T D Ameritrade.
ReplyDeleteI think there is a second leg down in GLD coming (like we had in SLV in September).
ReplyDeleteToo much money hiding there, one of few asset classes with profits in 2011, plus valuation out of line with Copper, Platinum, etc.
I thought we'd see a bounce this month back to the $175 range which I planned to short, but hope I haven't missed the opportunity.
Port,
ReplyDeletetough to be a content aggregator like TST mainly is with some original content when you've got Twitter making this easy to build essentially a custom tracking of info.
Think you either have to go big (like Marketwatch) or go niche like newsletters. middle guys getting squeezed like seems to happen in every business these days.
More support from BMO on current market sentiment being negative. Might also indicate an investment opportunity to pick up a few extra percent over a standard mutual fund:
ReplyDeleteWhat Investors Say Versus What They Do
What investors say and what they do sometimes conflict. Investor sentiment readings such as fear and greed surveys can be a good way to
track trends but they sometimes fail to reflect reality. The American Association of Individual Investors, a nonprofit investor education
organization, conducts a weekly survey asking their members whether they are bullish or bearish on the stock market. As of last week,
there more bulls than bears.
Taking a look at what investors are doing presents a different view. We examine activity in closed-end mutual funds as a gauge for the
way people are actually behaving. Unlike open-end mutual funds, closed-end funds issue and maintain a fixed number of shares. These
shares trade on an exchange just like exchange-traded funds (ETFs). The difference is that closed-end funds often trade at premiums or
discounts to the value of the securities they hold. We equate closed-end share trading to parking lot ticket sales prior to a sporting event. Big games with a lot of popular interest fetch prices above face value, and vice versa.
The ten largest closed-end vehicles are currently showing public skepticism with regard to stocks. They are collectively trading at an
average 12.7% discount to their net asset values. That’s about 5.5% below historic medians and is the largest discount since April 2009.
Fund discounts surged to 21.4% in October 2008 as investors were enveloped in a Lehman panic. Note that these discounts do not take
into account market movements, so the big discount in 2008 came on top of the 23% market decline suffered from the beginning of that
year.
In a world where investments move as reality converges with expectations, sentiment is a contrary indicator. Nervous investors have
relatively low expectations, so the scope for newly arriving good news is widened. If investors are expecting coal in their stockings, even a Pez dispenser would be a welcome gift.
CSTR almost filled it gap today. I'm surprised it wasn't hurt more from the NFLX rumor.
ReplyDeleteMDW is a beast I tell ya, a beast.
mark - is it possible to be a beast and be trading at $2?
ReplyDeleteTOF- Sorry I wasn't here in your time of need.
ReplyDeleteSomeone keeps selling gold -- crap!
ReplyDeleteForget the AAII. Let's consider a real sentiment indicator- infighting among Caraistas. Mos' def' happening today. So I say we go down tomorrow.
ReplyDeletebtw, I ended up in the 'Juror Number 1' seat for about 5 minutes today, only to finally be excused by peremptory challenge (by the defense). Just as well- it would have meant minimal blogging until late February.
ReplyDelete2nd- Too bad, but none of the early birds get a seat. That's why suckers like me get in once everyone is out of bullets. Might have slide by if your wore the right windbreaker though. Oh well.
ReplyDeleteRegarding CC. Is it a good fight? I haven't been over there since my George Soros is a saint in-citations, but you guys are tempting me.
ReplyDeleteAs far as pay Investment sites i think the free stocktwits is taking share from everyone and the street is an interesting short idea.
Looks like natural gas prompt month made a new yearly low of $3.217 before it closed this afternoon. The previous low was 3.212 on Oct 27, 2010.
ReplyDeleteRB- It was a good fight. Man, those boyz take the POG seriously. FF(CC) was an instigator... AGAIN!! :))
ReplyDeleteThe forward calendar strips for natty are making new lows as well. I'm showing Cal 2012 is 3.489 and Cal 2013 is 4.1048 right now. Natty is still in a bear market.
ReplyDeleteIf not a beast, how about a Hoss? ;)
ReplyDeleteXCO? I can not figure this one out.
ReplyDeleteMan, the charts are hard to read. I use bar's and when I see a tiny bar I go, man, that one didn't move today. Then I check the % and it's a 6% move. Damn.
ReplyDeleteCharts are a mess. Even Blue chip slow movers are sloppy as hell with big % moves in both directions whipsawing stops. I'm glad they vaccinated the european contagion so we can get back to 'normal'.
ReplyDeleteFF let me know if you want me to open a can of whupass over there.
HEK- So much for Frac worries. Seriously though, on a wider view, MOG's comments give me pause. RB gives me gas.
ReplyDeleteOppsss...Sorry, not THE RB, but RB, refried beans.
ReplyDeleteHere is a VERY interesting analysis of the EU summit:
ReplyDeletehttp://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2011/12/12/sorting-out-the-euro-mess.aspx
Here is a quote from it:
“The three-year unlimited liquidity operations announced last Thursday could provide infinite monetary support for European banks and through them, their sovereign debt markets. Once these three-year repos get started, banks in the Club Med countries will be able to borrow as much as they want from the ECB at 1% and use this money to buy government bonds now yielding 6% or more. Because of the unprecedented maturity of these repo-operations, banks will now be able to theoretically acquire unlimited government bond portfolios without exposing themselves to rollover or maturity risks. Banks will therefore be able to pick up 500bp of carry, with zero risk-weightings, by hoovering up all the debt their governments can throw at the markets. Of course there would be risks—we cannot say banks will want to jump on this deal, but in theory they can. This Ponzi scheme could potentially result in an even bigger money-printing operation than anything the US, British and Swiss central banks have done on their own accounts. It would allow the banks to rebuild their equity with no dilution to shareholders.”
I knew that things were much more complicated than they seem, and thus the factors that we are not even aware of will shape up the largest moves in the market...
Hussman, however, threw some cold water on speculations such as the one given above:
“Draghi said that he was "kind of surprised" that that others misinterpreted his phrase "other measures might follow" as a suggestion that massive ECB bond-buying would be allowed once a fiscal union was more clearly established. To the contrary, he rejected any sort of "grand bargain," saying "We have a Treaty, and Article 123 prohibits financing of governments. It embodies the best tradition of the Bundesbank. We shouldn't try to circumvent the spirit of the treaty." He specifically warned against attempts to use "legal tricks" to circumvent the EU Treaties.
Notably, the restriction in Article 123 specifically prohibits the ECB from "any financing of the public sector's obligations vis-a-vis third parties" - this does not simply restrict the ECB from buying debt directly (which could be circumvented by buying distressed debt on the open market). Rather, it is a restriction against using the ECB as a funding mechanism for public sector obligations. Read Draghi's lips: the ECB will not be initiating massive purchases of distressed European debt unless and until the EU Treaties themselves are explicitly changed.
We've seen some theories that Europe intends to address the problem through ECB lending to banks, taking distressed debt as collateral, with the banks turning around and buying more distressed debt. Apart from the fact that this would be the sort of "legal trick" that the ECB would be unwilling to facilitate, this would imply an increase in bank leverage ratios far beyond the 30-40 multiples that already exist (which would be a disaster when tighter Basel III capital requirements kick in). In practice, depositors would flee, and you would end up with a European banking system where bank bondholders, not the ECB, would be subject to the losses, since the ECB's collateral claims would be senior.”
Here is a summary from Hussman:
ReplyDelete"The bottom line is that last week's events took a great deal more off the table than sugar-addicted investors may immediately appreciate. In effect, if a fiscal union is achieved without treaty changes, the ECB is unlikely to act. But even if treaty changes are achieved, the ECB is unlikely to act forcefully unless those changes are credible. Of course, if the changes are credible, then forceful actions will not be needed anyway. In any event, the problem for bailout-hungry investors is that they will be deeply disappointed if they expect Mario Draghi to turn into Ben Bernanke."
Yes, Draghi said plainly say the ECB will not be initiating massive purchases of distressed European debt unless and until the EU Treaties themselves are explicitly changed.
ReplyDeleteSuch changes could take a long time, I guess the eurozone votes for high rates and a weaker euro (or an end to the euro?)
If the economy is expected to recover, why do the miners keep selling?
ReplyDeleteCP - some comments from yday re gold...
ReplyDeletehttp://www.cnbc.com/id/45641282
10:44 AM The legs are taken out from a modest rally in Europe after a report Angela Merkel has rejected raising the €500B upper limit on the permanent bailout fund (ESM). Stoxx 50 -0.3%, and being propped up by EU outsider U.K., +1.2%. The euro crashes through support, falling to its lowest level since January at $1.3119.
ReplyDeleteMDW news...Don't have time to read it. At the close ladies.
ReplyDeleteKyle- Where do you get your news?
ReplyDeletehttp://seekingalpha.com/currents/all
ReplyDeletebelieve BB mentioned it a few weeks ago.
Also,
http://finance.yahoo.com/marketupdate/update
Oh I see, the dollar took off like a banshee to over 79.80! Sheesh, miners anticipated the move I guess, it looked like the dollar was ready to drop...
ReplyDeleteThe 2 I watch are the seeking alpha link Kyle posted plus http://www.marketwatch.com/story/newsviewer
ReplyDeleteReuters has a nice app called newspro if you have an android phone for away from your computer
just sold the rest of my XWES...I saw a big bid on the stock so I hit it with everything. I ended up taking a good sized loss on the stock...I also sold 2k of my NOIZ, which is now a large position but manageable and is up about 20%.
ReplyDeleteMy portfolio is now about 13% lower than my high of the year which was right before the CSTR earnings. I'm looking to move into more liquid holdings at this point. Still up about 160% this year, which is crazy but I am finding it much harder to trade this market than it was from the March 09 to May 2011 time frame. I'm basically flat since the end of June and just want to hold on to my gains and take a bit less risk.
Don't really know what Gartman's track record on Gold is, but he is always on CNBC being asked about it, so I assume it is reasonable:
ReplyDeleteDennis Gartman is out of gold, seeing "the beginnings of a real bear market, and the death of a bull."
In his Gartman Letter published today, Mr. Gartman warns that the incredible run-up in gold over more than a decade appears to be at an end. He noted that China has been buying gold aggressively over the past several weeks, which should have sent the price surging.
"Instead they plunged," the publisher of the letter wrote today. "One of the oldest rules of trading is simply this: A market that cannot or does not respond to bullish news is a bearish market not a bullish one."
Mr. Gartman, who, as Bloomberg News noted, correctly called the 2008 commodities slump, said that "we are out of gold" as of yesterday.
"Where then can gold go?," he said in his note as prices were little changed today after yesterday's tumble.
"Lower, we fear and perhaps decidedly so. So much damage has been done to the psychology of the market in the past week and so many late longs have been caught off guard that we think wholesale liquidation … and perhaps forced liquidation … shall be the outcome. We can imagine gold trading back toward €1075-1125/oz and/or toward US$1475-1525. It really won’t take much to push it there. Panic liquidation would do so rather swiftly. We’ll simply stand aside from the gold market then, preferring to be long of gold and not wishing really to be short of it. The sidelines seem the cozier of the two."
TOF, 160% is excellent any year and especially this year being so difficult - congrats!
ReplyDeleteObviously, miners aren't going to get a good price on their materials under these conditions.
ReplyDeleteI guess Germany likes lower silver for their solar panels anyway, assuming their panels will be using silver, which isn't necessarily 100% the case.
Lower lead and zinc (base metals) prices will result in higher cost of mining silver, so even assuming silver remains high, profits will suffer.
Gartman is known in some circles as the commodities king, BC doesn't seem to think much of him for some reason.
ReplyDeleteSpeaking of ZINC ...
ReplyDelete9:27AM Horsehead Holding provided an update on its 2012-2013 hedging program; purchased zinc put options with a strike price of $0.85/lb, sold call options with a strike price of $1.20/lb, and purchased call options with a strike price of $1.81/lb (ZINC) 9.20 -0.32 : With forward zinc prices lower than when the program was implemented, the Company recently bought back the $1.20/lb call options for approximately $15.7 mln and will realize a gain, before taxes, of approximately $13.4 mln. Through September 30, 2011, the Company had recorded a net unrealized gain of $19.1 mln relating to these call options. The cancellation of these $1.20/lb call options effectively eliminates both the risk of a potential cash collateral requirement and the limitation to the Company's profitability, in the event that zinc prices increase above $1.20/lb.
from
http://finance.yahoo.com/marketupdate/inplay
MF Global - My understanding is, the Canadian accounts were all made whole b/c rehypothication is an illegal practice in Canada.
ReplyDeleteSo where'd that money come from, if MFG had levered the "segregated" accounts, then weren't those funds also stolen?
ZINC - Thanks, I was wondering about them...
ReplyDeleteSVM - I remember thinking not that long ago that a PE in the mid to upper 20's seemed enthusiastic...
ReplyDeleteI agree with Gartman. I was thinking Gold's bull run was over after looking more closely at the longer term chart, which had all of the signs of a blowoff top in July/August: massive volume spike and a HUGE move after a really long bull move. The move from the end of June to the high in August was about $45 which is more than what Gold was trading at in 2005. That's the reason why I have very little interest in taking a position in any metals company.
ReplyDeleteThe question is: where does this money go to? If the bears are right and we are heading into tough times then this is probably the last final bull market in any equities class. If the bears are wrong then my suspicion is that money moves into Treasurys and / or the stock market in general.
EUO/FXE - has a small position and sold most of it yday. Thought FXE would bounce, but not so much so far...
ReplyDeleteIVR - Dividend is 23% and they're buying back shares???
ReplyDeleteI guess one option is try to pick a top for oil and go short once tension with Iran peaks.
ReplyDeleteI think if oil can't hold this level, there's more downside in store for gold, ~$1400 handle isn't out of the question, and if the market crashes on Europe, considerably lower.
ReplyDeleteI sold my MITK at a small loss....moved a big chunk into BGZ long at $31.27
ReplyDeleteI'm only going to trade BGZ as the one thing that has me worried about any short position is the VIX...why would this be dropping so much yesterday and today?
ReplyDeleteI still hanging in with MITK tof, I still believe it's a real winner.
ReplyDeletewish I hadn't dumped this one:
12:41 PM RBC Capital's Jason Kantor weighs in on the news that Seattle Genetics (SGEN -0.3%) scored a victory with testing of its Adcetris drug for Hodgkin lymphoma, and is closing in on Phase III trials. The analysts say that if the drug becomes part of first-line treatment, it would "significantly increase" the target population for it by 4X-5X. "Most doctors we talk to believe Adcetris will ultimately become part of standard of care."
EUO - I guess we should short the euro now, since it appears Merkozy has completely abandoned the hopes and dreams of a unified Europe.
ReplyDeleteJB - When did you get into MITK? I really like it too and the technical setup is great right here with the 200 DMA right below us. I just wonder if it tests $6.5 again one last time before rallying.
ReplyDeleteCP - was listening to one of the currency traders on cnbc's Fri show. She was expecting a bounce in FXE to ~136 (ie roughly up to the U-BB) to re-short. Well, we didn't get it did we.
ReplyDeleteMan out Window
http://www.cnbc.com/id/18724672/
TOF,
ReplyDeleteI'm not ready to say the metals trade is over here.
You've got zinc and lead under $1.00 per pound, so I don't see much more downside there. Copper at $3.40 is a tougher call is it is historically high, but they are supply constraints which may keep it's price up. Most of the base metals miners reflect these lower prices.
I think all the PM's should take a downturn here and the PM equities will follow, even though many are fairly cheap relative to the metals.
I am not buying any metal stocks here either, but I have a large position in a mining services company called Foraco that is having a great year business wise and stock wise that I am not selling either.
After the recent drop in GDXJ, its chart since October 4 started looking like a clear H&S pattern. With gold having broken through its support recently, I worry that the H&S on GDXJ will break to the downside, sending it sharply down and taking AUMN with it...
ReplyDeleteLooks like Jeremy Grantham's prediction is coming true: because of a slowdown in China and European mess, we are getting a second in 3 years "once in the lifetime opportunity" to load up on metals for cheap...
ReplyDeleteGold fell through the three year uptrend, LOL, feels like a repeat of 2008 setup in the making.
ReplyDeleteEuro bounce - "we didn't get it did we."
ReplyDeleteWe might really see the euro plummet depending on what the Bernankster says in the next few minutes, Merkozy certainly isn't helping the euro...?
So wonder what Germany's ultimate plan is, leave the euro for the Deutschmark then print like mad to recapitalize german banks, perhaps?
Germany could make a simultaneous commodities grab, as well...
Just trying to think ahead, Peter Brandt swears US commodities trading is about to pull a belly flop due to the MF Global fiasco, and Iran's threatening to shut down oil shipping...
Federal furloughs?
Ugh!
FED: "US Economy expanding slightly while global growth is slowing."
ReplyDeleteBill's right on this, for the most part, but Gartman sold half his gold above $1700 a few days ago, maybe sold the remainder yesterday:
ReplyDelete"Re: Dennis Gartman out of gold, proclaims ‘death of a bull’
Submitted by Bill Cara (3185 comments) on Tue, 12/13/2011 - 14:13 #101937 (in reply to #101933)
Dave M,
This is interesting, but does anybody really care?
When the price was 1650, I reported that Dennis was on CNBC shouting SELL SELL SELL, and then Gold soared to 1900 soon after. Then after it pulled back to about 1620 before shooting back up to 1800, Dennis went back on CNBC, which I reported again, saying it was going much higher. Alas, Gold immediately took a nose dive to about 1680. Lately Gold lifted again to about 1750 before falling back to 1670. Now he says SELL SELL SELL again? Must be going up.
Maybe he'll go back on CNBC in a month to say the he was still holding Gold denominated in Yen? Too funny for words."
FED meeting - Initial response a head fake?
ReplyDeleteCP - I remember calling out Gartman about this same thing on CC several years ago and BC defended him. All of these guys, including Kass, manipulate the media to get in/out of their trades. It's a total sham.
ReplyDeleteS&P just broke to a new low for the day. I don't like this market action at all. I just sold all my 1400 shares TBT at $18.85. The average cost for these shares was about $20.35.
ReplyDeleteAUMN just broke down to a new low as well, below $6. So I would rather use these funds to keep scaling into AUMN.
For the short term, Gartman seems to be correct on gold. Both gold and silver just fell out of bed.
ReplyDeleteAlso, just sold at $3.63 my 2000 shares of ONP, which I purchased at around $2.50. ONP is not moving up after its early-November rally, and its morning low at $3.09 shows that it can drop back to $2.50 in a blink of an eye. So I would rather take profits here while I can and raise more cash to buy AUMN on the cheap.
ReplyDeleteGDXJ just broke to a new post-October 4 low. This represents a break of an H&S pattern, which can send GDXJ much lower. So I'll wait for the move down to stop before adding more AUMN.
ReplyDeleteSold my BGZ for a $2,500 gain.
ReplyDeleteCME - Yep, wonder how much more downside this thing has...
ReplyDeleteGood move on BGZ, TOF!
ReplyDeleteDavid - thx...I think we could rally from here for no other reason than everyone is bearish
ReplyDelete"All of these guys, including Kass, manipulate the media to get in/out of their trades. It's a total sham. "
ReplyDeleteYeah, that figures... Also figures BC doesn't know what he's talking about once again. Big Surprise.
Maybe in the longer horizon it will work out, right now the downside pressure as a result of the situation in Europe remains huge as the dollar serves as refuge (and whatever other forces make it popular), I underestimated the severity, shoulda trusted my personal experience and ignored the "experts".
Not the end of the world, just more severe than anticipated.
Glad your out of XWES TOF. That position had ME nervous :)..Kinda strange to see that big bid sitting there.
ReplyDeleteThe VIX has been strange the last few days.
Gold. Hmmm...Not a big Gartman fan, but if he's right I'm guessing the money goes into equities. I feel the POG is related to fear, and if that fear goes away greed get's a seat at the head of the table!
David - GDXJ H&S? I don't see it, is the head in November?
ReplyDeletei didn't realize how much attention was put on GLD and the symmetrical triangle pattern that technical traders were looking at. as we have seen time and time again, a breakout of that pattern seems to be a reliable point at which to fade the crowd. As such, going ultralong gold right here for a trade probably makes a lot of sense.
ReplyDelete"going ultralong gold right here for a trade probably makes a lot of sense."
ReplyDelete"a breakout of that pattern seems to be a reliable point at which to fade the crowd. As such, going ultralong gold right here for a trade probably makes a lot of sense."
Yes, I think that's what Bill's thinking as well but gold is still high in terms of copper and if oil comes off, there will be additional downside pressure on gold.
I don't see any signs of printing, just an end for the euro, which makes the dollar wildly popular.
Traders were looking for QE3? Yikes.
ReplyDeletewow left $7k on the table with that BGZ trade. damn.
ReplyDelete1217 is a support from what i've read.
ReplyDeleteNew low for UXG. Wow.
ReplyDeleteIs this, wholly shit, I better lock in my gains before the end of the year or my ass is toast?
ReplyDeletei'm gonna start building up a position in MITK now. bought some at $7.95. 200 DMA is at $7.88 right below so this is a low risk trade IMO
ReplyDeleteMark - "I feel the POG is related to fear"
ReplyDeleteI expect there's quite a bit of fear in the market concerning viability the euro and gold is popular there, the dollar is serving as a safe haven just as gold does but the dollar is considerably easier to get in and out of and for us and them that makes the dollar more attractive for the time being.
I figure a fair value for gold is about $1460 relative to copper and especially if oil comes off to $95 or less gold should fall.
The current trading range for gold is $1600~$1700, and silver is $30.80~$32.70
If the situation in the Persian Gulf heats up, oil could run to $125 and if so, gold might run to $2000 and silver to $38
Mark - might be. There were 2 big gaps up that last week of Nov. (28 & 30 Nov)
ReplyDelete"David - GDXJ H&S? I don't see it, is the head in November?"
ReplyDeleteYep. November 7, the day of the Great October Socialist Revolution was the TOP OF THE HEAD. :)
I did a good deal of buying into the close on MITK. I'm really liking the setup here...especially with the Mobile Bill Pay catalyst imminent and with them making inroads into insurance companies (with signing of Progressive). I'm thinking this could trade back up to $12 again pretty quickly.
ReplyDeleteWhat if mid-155's turn out to be a strong support level for GLD starting from October 4, and the lower highs on GLD simply combine with this support to form a descending wedge, which usually breaks powerfully to the upside... It is too early to throw in the towel on gold, I think.
ReplyDeleteWow. The VIX closed down AGAIN today. That's really insane given the move in the SPY since Friday. The VIX is down about 5 or 6% since Friday's close while the S&P is down about 30 points. The VIX is down almost 20% since last Thursday despite the market being down about 5 points. This makes me really wary of being short.
ReplyDeleteFWIW...Gartman on FAST talking Gold
ReplyDeleteIPI on L-BB but up on day
Wonder how the UXG pumper/dumpers are feeling now?
ReplyDeleteI think a lot of the Gold action is because gold really was the mo-mo play of 2012 and virtually everyone is bullish on it. After today, it is still up 15% for the year, probably still the best performing asset class.
ReplyDeletePeople are selling to lock in profits or because they bought into that last spike and just want out.
I'd still like to see a bounce back to GLD 170 - 175 which I would go short at. It's interesting that a lot of people are saying no to gold (Gartman, Todd Harrison, etc.), but no-one is saying they are shorting. Too many wounds from trying that in the past I suppose. Also means there could be a lot of air under the current price with little short covering to support if we get some serious momentum to the downside.
If we do get a big move similar to 2008, the junior miners could get killed like they did back then. BC's UXG went from around $7 to under $0.50 that time. Also, the miners started heading down before the metal that time, same as now.
Cramer still bullish on gold, but he never catches turns. He just waits until the trend is obvious then jumps on board. Saying be ready to buy more at $1,400, but that's still a long way down to ride it.
ReplyDeleteKass called the end of the gold bull in late 2010, so I guess he would say that he he was just early again!
To be fair, I thought the same and sold all my gold stocks in the fall of 2010 and it is tough having all your calls out there and getting some wrong is part of the game.
This morning Kass Tweeted he was the longest he had been all year and went 5% longer mid-day. I'd like to say this is a good sign, but he did the same thing a half dozen times at least in late 2008 / early 2009 going "all-in" or "leveraged long" but he seems to forget those and only mentions his "generational low" call in March, 2009. All of those earlier buys would have ended up good for him if he held them, so his fundamental view on things was correct, but he does tend to be early.
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