Saturday, August 8, 2009

When the Bears become Bulls, Give It Up, It's Only Up from Here in the Intermediate Term

If you don't understand this post, then no offense, but I will be enjoying the money from those who bet wrong. I called the top a few weeks back and there have been minor gains, but that's it.

The credit market is almost 400% of GDP

Household debt is 130% of disposable personal income.

The savings rate is rocketing up, although income is going down.

Government consumption is going up a bit, and private consumption is going down quick.

Capacity utilization is at 68%, the lowest since 1970.

Household net worth has the longest string of losses since 1950.

Comments appreciated.

2X and 3X Vehicles

No I don't mean oversized cash for clunkers.

I mean leveraged trading tickers.

You can't get leverage without paying a fee or taking a higher risk. These are NOT BUY AND HOLD. You will be decimated even if you are correct on direction.

2X and 3X stuff is created with options, which have diminishing time value.

If you buy options directly you have diminishing time value working against you.

If you buy futures you are subject to having your stops "hunted" down in the middle of the night when open interest is much less, and hunting is more sucessful for those running the Hal 9000's.


SDS and SSO are awesome daytrading vehicles, the liquidity is so high, you are protected from a manipulative stop hunt, and they trade to the penny. Options have higher bid ask spreads and that works against you.

Thar's Gold in Them Thar Banksta's Pockets

OK, another linkfest. To the European Central Bank. There are some powerful and respected names in that organization. There are so many countries involved it makes it hard to think that there is concerted corruption involved in the decisions.

They have decided on a systematic sell-off of Gold, over a 5 year period. On the face of it, this seems absurd. Every country is going to be printing money, so real money (Gold), should in theory get more valuable.

The alternative view, and the EWI view, is that Gold and every asset class, is going to take a dirt nap as credit is tightened. But bear in mind, as a long term paying subscriber to EWI, I have seen them be wrong...way wrong, many times. The up side...they have original thinking and original data as I strive for. The downside...they hardly ever admit a mistake or post-analyse why a viewpoint went wrong. This makes me think they are more interested in selling subscriptions than in education and success of it's members.

When everyone gets disgusted with paper money, aka fiat money, or as I like to oversimplify "fake money", with Gold being the only real money, that will create demand for the REAL MONEY.

Now here's one for you all. Since we have all these depression analogies going on. The United States made Gold illegal. In 1933, in order to stabilize the monetary system, President Franklin D. Roosevelt, under Executive Order No. 6102, confiscated all privately owned gold in the United States. In order to go into your safe deposit box after that Order was issued, an armed enforcement official would accompany you, and if you had gold in there, you would be in some deep Kimchee.

OK so you have read the above. Here is the deception part.

The ECB "selloff" is actually a reduction in gold being sold. They used to allow 500 tons per year to be sold off, out of 10,000 total tons of gold that they own. But Germany, after their past hyperinflation, owns 40% of that gold and they firmly state they will never sell any of it. So really there is only 4,000 tons "on the market", now they are reducing the amount to be sold to be 400 tons per year. That's 11.6M ounces, or roughly $10B per year at $900 per ounce

So a little more math to bring things into perspective...they are holding about $250B in gold assets. But the worldwide "notional" value of various financial derivatives is maybe $60T or maybe $200T. Who knows? This stuff is pretty murky. But the point is, regardless of what that number really is...isn't the relative percentage to "real money" just absurd. The entire world is being gambled, and you knows what happens in gambling, the "house" wins.

The real news on Friday, was that the Bank of England decided to increase printing money, giving money to banks, and keeping interest rates really low 0.5%. The real news was not the Jobs Report, which is BS anyway and getting worse.

The only "down sector" for Friday was the Gold miner index. There are alot of poorly informed speculators who exactly misinterpretated the ECB Gold selling news.

Junior Miners took an incredible pounding in the last few years. Many will never develop their lands into real gold producing mines. Many junior miners are simply and fully scammers, the stories are interesting.

The guys below are developing a mine in Panama. Supposedly they started actually producing gold, and then were shut down by "environmentalists". It's an amazing world we live in.

Greediest of All Time

Rarely do I just point to link, so Pigs Fly Into Frozen Hell (PFIFH), here it is.

A very interesting review of some of the greediest people of all time. Actually though, these people were not just greedy, they were succesful at it.

I think what could be an even more interesting list would be the people who allowed others to steal trillions of dollars, but their payoff was only handfuls of millions, now that is truly "greedy". Talk about a totally non-utilitarian way to operate.

Friday, August 7, 2009

ES Popping Stops

Es Roadmap....don't get freaked's easy to see whats going on. Is that lower channel line from the March lows is broke to the upside...the market is going up. And we rocket into Armageddon from a higher level. Personally, if I am forced to jump off a roof, I would prefer to jump off a garage roof than a top townhouse roof.

Wow, I was glad to be hedged with LVS (Long -- yes this does mean that Pigs will Fly Into a Frozen Hell PWFIFH). tight stop under this....WTH, I am satisfied with 20% gain in 4 days...I went long after the breakout through 10 to 10.5.

Thursday, August 6, 2009

No use for charts now, the market will tip its hand soon, here is NEWS

News....I want to make a collage from different sources, but found it all in one place, just had to comment.

Comment from "Ticker Street" who has a nice blog, check it out...

C has been rising like a turd. The media says it is "rebalancing". Do they mean that C buys its own shares to pump up the market? In the last 2 days, 25% of the NYSE volume is from C and BAC. WTH! Why don't they make them public sector banks? Do we need these stupid private banks? There are many countries in which public sector banks are outperforming private sector with solid fundamentals.

steveo postulates:

I would guess that C gets some real cheap money from the Fed ( or whatever combination of liquidity provider and/or Government Sachs), jacks up their share price, since everyone knows the market won't go down unless financials do, and I bet some government pension funds buy the C shares at the higher prices to keep the rally going.

Gasoline (a.k.a. liquid bananas, but that's a whole different story) started this fire, and the only tool they think can work is to keep throwing more gasoline at the fire. "We have too much invested in saving this economy to stop now". It won't end well.

But here is the key, of the trillions printed there is 10 times more out there are loans (credit). In the next financial panic, this contraction of credit, i.e. the ability to buy things and spend money will be massive related to the printed money increase. I guess the government will then start lending money directly because "we got so much invested already, this has go to work". But people will default no matter what the interest rate is.

You know how many people I am hearing just this week saying, I am not spending anything no matter how good your financing is, even with 0 interest, I want to see what happens in the economy or the market. This is in my own business. You can have a solar system pay for itself in a year, and they get free money for a year, but they still don't want it. Welcome to the future.

You know how many people I heard in the last 2 weeks tell me...I am not sure I can stay in this house so I don't want to invest anymore even if its a good payback or a net positive increase in equity, I don't care, i am $50,000 underwater on my mortgage, and I just ain't going to spend anymore regardless of how the numbers look. OK, welcome to now.

Business strategy: try to sell to rich people, until they also are infected by the collective psychological malaise. Then move to some ag country and buy farmland whilst their economy tanks and global shipping of food becomes non-existent (depressing farmland prices). OK, if this strategy works for you send a nice donation, and if it doesn't, sorry, it was free.

Wednesday, August 5, 2009


This seems like great timing for a big turn downward, but there are large vested interests who want to see otherwise. Rebuilding a wall of worry from a lower point, along with rebuilding our industry, work ethics, and moral and legal accountability of all those in charge, are all necessary to the growth of country. Silly confidence based on lies is not good enough.

Or another teaser as the Gov hand out $5B to some undeserving bank, who then takes their cheap money and as they promised big Ben, they would promptly "invest" it in the market. Excuse me, is "jacking up" the futures market "investing".

No, but somehow they have convinced themselves, that if they can just "con"vince the populace to get their "con"fidence back, that 20 years of living beyond our means, and an entire bad business cycle can just be skipped. Fat Chance. But that doesnt mean they won't try. And they have our money and our children's money to use in the process. Ouch.

Quest for Sanity in the Market

In the Blog world, it seems many participants are throwing up their hands looking for any gasp of sanity in the market.

And this I have to say, is a sign of one or two more big push up--enough to get even the most hardened bear to say, enough is enough, I'll suck up these losses, this is just too much. And although most of us were trained that it would be fall when we could "look forward" to armageddon, the market doesnt usually do what it is supposed to do, at least, when it is supposed to do it.

Here is that XLF with the Fib target. Notice XLF up 2% today whilst general markets tank?
Sorry this "teaser charts" is going to make you looks for yourself on where XLF will be

Do you have your "stink puts" ready to buy, price points picked?

I think OFC may have already hit its highs. It spiked up right through the bit 61Fib and then obediently retreated.

Tuesday, August 4, 2009

Short Long on ES

Price and MACD coiling. Probably just a nighttime trade, but we will see, maybe I put a limit sell at 1020 and catch a blow off top.

Iron Eagle -- Ascent of the Downtrodden, Don't Tread on me

We figure that even bulltards can understand a high five and a picture.

ES Channels and Head and Shoulders

The chart speaks for itself. I am not going to pimp this one out on Evil Spec, Slope, or Xtrends. This is for "the club". As was walking my He-Wolf and She-Wolf tonight, I took particular note of the full moon, the moon in Leo after the biggest eclipse of the century... and my birthday is 8-11, so I am thinking that this is going to be a lucky month.

You NEVER "Get Money Back"

RULE ONE - You never "get money back" from the market. If you have lost it, it is lost. You can earn money moving forward by proper trading, money management, etc.

But to ramp up leverage to try to get money back is not just poor trading, it is poor gambling. And after significant losses, is not when you ramp up to new levels of leverage. You might be able to "prove" that you were right all along, or you might find yourself in a world of hurt.

Bullish Sixpacks and Doctor Copper (Atkins)

OK, so the super low carb diet is working....13 pounds in about a month, but I still don't have those six pack abs, so we stay on the low carb for a few more weeks.

But speaking of Six Packs and Doctor Copper, we have reports from various Joe Six Pack Indicators around the country...JSP is being hurt emotionally by missing this rally and is ready to jump on it--reports from real people who are asking semi-pros---is it OK for me to jump on this rally.

The bullish percent index is reaching levels associated with highs.

So here is a strategy to think about...a real blow off top...enough to almost get XLF to hits its 38 Fib, it has struggled to get past the 23 Fib. Set some stink bids for puts....really low prices, that might get filled in a panic selloff (i.e. blowoff top on equities, panic sell off on puts.

Monday, August 3, 2009

Doctor Copper

The US copper spot price has been going up fast. The US inventory of copper has been going down pretty fast. The London LME has had rapidly increasing inventories.

Is there any obvious conclusions? Europe is screwed? China has been giving dollars back to US in exchange for copper?

Sunday, August 2, 2009

Panama -- Brave New World

Hey our first visitor from Panama, a country near and dear to my heart, since I own a boatload of PTQMF. Petaquilla has an interesting history to say the least, they are apparently newly producing gold, although they have been shut down by locals protesting environmental issues.

It is almost worth a trip down there just to check it out.

By the way, DON'T BE DECIEVED. This rally is a bunch of bull. When I start feeling bullish, I use myself as a contraindicator. I am feeling bullish. Got it?