Thursday, September 12, 2013
09/13/13 Far From The Madding Crowd
GDX closed down -5.64%. Time to buy, right? After all, if I was bullish +10% ago, why not more so now? That’s the kind of ‘logic’ that doesn’t work when it comes to crowd psychology. We see it quite often at the tables. If I notice players clearing a craps table after shooters ‘seven out’ 5 times out of 6, I may start placing higher bets on the ‘Pass’ line. If the game continues to ‘seven out’ 9 times out of 10, I’d be more inclined to bet the ‘Don’t Pass’ box. Crowds are not known for logic, and using logic to place bets on the stock market is a losing proposition. I plan to wait for a better pitch.
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I know a lot of traders are betting on a major rally in miners. If it happens, great! The question to ask, however, is what if it doesn't materialize? What if gold retests its summer lows, and then goes on to test 1000? No way? We all know the odds of the 'unthinkable' occurring in the markets is well above zero.
ReplyDeleteRemember the NGas rally last spring? Traders were convinced the commodity was finally taking off. NGas spent the entire summer retracing the entire rally and even managed to hit a new low in August. That's the kind of scenario I'm afraid the miners are headed for. Traders convinced that buying the June low of 22.21 for GDX insures them against catastrophic losses may discover the joke's on them at GDX 11. Can't happen? If we equate $15 NGas with $1900 gold, we could be looking at a long multi-year decline ahead.
DeleteIf gas is truly a viable transportation energy source in addition to everything else it has always been and promises to be, there better be butt-loads of it. Thus, the longer it remains low, the more viable it becomes and the monster grows vast tentacles as the transition proceeds.
DeletePM's are a great mystery, nothing less.
Great point 2nd.
ReplyDeleteGold/silver hit 1306/21.4x overnight before bouncing.
ReplyDeleteHow do crowds behave? They buy when they see others buying. They sell when they see others selling. Buying begets buying, and selling begets selling.
AET - Neutral -> Buy
ReplyDeleteNSPH news
ReplyDeleteDown on good news is very bad and down on bad news isn't as bad. Up on bad news is the very best scenario.
DeleteThey don't seem to be making sale targets.
DeleteDilution at $1.75, that's not good, obviously sales not enough like you say.
Delete1691 is the resistance
ReplyDeleteJohn Harwood @JohnJHarwood
ReplyDeleteSource near WH on Summers/Fed: "getting vibes re: next week. Vote count work almost done." Syria pause has created space in POTUS schedule
InterMarketAnalysis @wallstreet1928
Now you know why the price of #GOLD has plummeted … insiders already knew Summers would get the nod … He is a Hawk = US dollar positive
Say what, Summers got the nod?
DeleteI expected mREITS would get hit on that, not happening.
Consistent with regional banks though, KRE getting hit.
Yellen appointment should beat the big banks down and regionals fly.
I guess WS gets it's way with Summers, right?
I think Yellen gets appointed.
If Yellen get's it, it would be the biggest head fake I've seen in a long time.
DeleteOkay then, Summers wants taper so then rates continue up, and dollar also goes up due to demand for debt at higher rates?
DeleteNot good for mREITs, not good for regional banks, good for TBTF WS boys, Summer is a WS boy, right?
We need to at least try to anticipate the fallout, don't we?
What I'm focusing on at the moment is, supposedly the consensus is Summers' appointment should ease the pressure on TBTF, and isn't considered positive for mREIT's(among other macro subjects TBD).
DeleteSo if Summers is the appointee, then why wouldn't mREIT's be tanking now as opposed to rising slightly?
And gold doesn't seem to have any correlation to anything, gold could actually go up along with the dollar couldn't it? Let's say an emerging market defaulted in a big way, wouldn't that be positive for the dollar and probably gold as well?
DeleteI wouldn't trust gold to do anything short of never going all the way to zero, and in that case silver is probably the better choice b/c it's at least an industrial metal.
And I agree with BB, this nonsense over Puerto Rico is a buying opportunity, it's TBTF trying to mislead us into selling something that's about to take off, especially if rates increase (Summers is appointed?).
I guess we're going in, is that what's knocking market down now?
ReplyDeletePACB was the small cap biotech play over NSPH.
ReplyDeleteDoubled down on the UGAZ at $17.6X and sold it all at $18.3X.
What about BRKR, they're also are in this particular rodeo, aren't they or not?
DeleteI guess I just don't understand the advantage of a microbead based on a hydrocarbon vs one made of gold in terms of optic consistency, but the mass spectrometry guys are into this type of analysis as well, so it's all pretty confusing.
DeleteAnd then, PACB has that fast talking guy from Stanford who's Mr. Wonderful, he submits new patents daily I think, right?
NSPH - I see this one as a pipe dream of a woman who perhaps means well but these micro gold crystal balls are way out there. Seems like with Hitachi taking an interest, they must see something to it, but maybe they just want access to some small aspect. Hitachi could buy NSPH in a blink of an eye, if they perceive something they need for their portfolio.
DeleteI dunno, I just don't see what's so great or unique about PACB I guess, nobody seems to understand it, or maybe I'm just not listening.
The FED could surprise mREIT investors unexpectedly....
ReplyDeleteBizarre title, either one or the other,,,, where's the surprise?
And, if QE was bad for PM's, then why isn't the winding down of QE? Summers is said to be in favor of winding down QE, so what's up with that?
ReplyDeletePundants also claimed QE was bad for Reit's as well, but REIT's didn't fall, it seemed QE actually helped REIT's. Now with Summers appointment, REIT's expectaions are said to take a hit (higher rates and lower BV), so is it already priced into mREIT's?
Japan source - Obama will nominate Summers, LOL, Japan knows first?
Stria - We're going in there soon, to stop the flight of refugees out of Syria. Right?
ReplyDeleteSPX -- MP view from 61p8 ...
ReplyDeletePeter Ghostine @PeterGhostine
$SPX chart up date. http://stks.co/rSZJ
http://charts.61point8.com/20130913-SPX-MP.png
Higher rates (Summers appointment?) means tighter monetary policies and thus rising dollar and less impetus for equities, right?
DeleteStocks generally go up with rising interest rates as long is it is because the economy is getting better. If rates are raising To fight inflation, then there is more pressure on stocks.
DeleteNot sure the Market Profile portrait and the Summers rumors are all that related ... :-)
DeleteRighto. Rates fell a bit today. It's not a trend though, LOL! :)
DeleteFMAR - Off the cliff, must be Summers is appointed!
ReplyDeleteSUMMERS - Gotta admit though, the guy is one confident SOB, his voice doesn't crack when someone asks him a question. Obviously his balls dropped at a young age.
ReplyDeleteI don't like him. He is a Rubinite.
DeleteNSPH - looks like this one is gonna take longer than I expected to mature. A couple of gaps on up to fill however.
Exactly, I think he's bad news as well.
DeleteSummers out of the running for the Fed - not that I think it really matters as far as stocks go - the good stocks will be good regardless:
Deletehttp://www.reuters.com/article/2013/09/15/us-usa-fed-summers-idUSBRE98E0FR20130915
'Doubled down on the UGAZ at $17.6X and sold it all at $18.3X'
ReplyDeleteRight on, tof> that's the kind of bread-and-butter trade this blog's known for.
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ReplyDelete