Saturday, February 20, 2010

Gold, Plain and Simple

Currency analysis in 30 seconds.  

I just received the book "Gold - the once and future money"

Governments that are not restricted in their monetary supply, such as by being linked to gold, or tribbles, or whatever, will print money to keep their constituents happy, and keep themselves in a job and a position of power.

The ruled, "the people" will vote for people who are willing to give them what they want.

In the long run, this doesn't work.  Wealth (and the hard work that brought it) are destroyed.  

Gold is currency, not a commodity.

If you had say 80% of your wealth in Gold, and the rest in a trading and FX account, you might feel pretty smart.   If you held the gold in an offshore account, you might feel even smarter.

Thursday, February 18, 2010

Late night Fear Factor update, and Blog Etiquette

Feel free to post charts, or to link back to your blog, or to other websites of interest as TomofTheNorth has done today....and stop by his site class financial satire.   If you don't laugh, you ought to cry.

AND please fill out the Poll on the right, I think it is my best one yet.

And sign up as a follower if you haven't already.

Fear Factor (FF) is showing bullish trending at the closing, Expiry is tomorrow, should be wild.

steveo77, out.

My Real Trade Ideas

Don't do what I do, I am plumb loco! 

I have mostly near term short positions, and one long (NQ futures).

I expect a bunch of bears to jump into the fray tomorrow AM.....then with tinfoil hat firmly in place....a massive ramp at end of day, trapping most bears.   Then lots of upbeat media over the weekend stating how the economy is so good we can raise rates....

But as corrupt as these guy are, don't think they are pure dumb.    That currency swap thing for like $650B they did, actually turned out in the US favor, and it did greece the worlds wheels a little.

This maneuver can make flight to dollar strong, perhaps flight to Gold strong as Europe wants to sell gold. 
From my previous post, the idea is from Jammermpu, but charts are from me....this could be a very bullish run....a final crushing of the bear spirits....many bears will just try to get a job they will be that desperate!

Fed Raises Discount Rates in an Afterhours announcement

Serious Shenanigans Again.

Fed Raises "Discount Rates" after Wed close of Expiry week---- after hours. 

The market had been acting weirder than usual last 2 days.  Do you think that news could have been leaked on the "inside". 

But keep in mind this IS NOT the Fed Funds rates (kind of the bank to bank loan rate), but the discount rate...emergency cash when a bank needs a quick tide me over loan from the Fed.  

The move was intended to move markets and it did. 

Quick theory.  US gov needs to sell treasuries, I heard over $100B next week.   And Europe need to sell gold to keep Greece floating for a while.

So---bash the market with a surprise rate change after normal hours.   I wouldn't necessarily take this as bearish, though.  Big Ben might be gearing up for the next ramp job.    In the brave new world, no one will be allowed to carry a negative attitude.

Jammermpu had this comment yesterday.

TBT long, expect yields to go up.

 We mentioned a few weeks back ---buying TBT "long", it is really a bearish play though.

TBT is

UltraShort 20+ Year Treasury ProShares
Financial - Exchange Traded Fund - USA  

 Gov will need to, in desperation, pay higher rates to keep refinancing it's debt.

If someone gave $50,000 or 20 Year Treasuries, but you could not sell them for 20 years,
$50,000 in Gold --but you couldn't sell that for 20 years, which would you take.

Back to a trading level--

There is an alternate theory though, flight to safety of USD, and in particular Treasury Bonds, could jack up the price of bonds, which is exactly the same as saying decreasing the yield.

Those are directly and mathetically related.

FF testing 50 channel, and odd dislocations in USD GLD yesterday

See post below for larger term view of my "indicator in development". I think it's a great indicator, just not sure to best trade it.

Wednesday, February 17, 2010

Fear Factor at the 50% channel line

Interesting to see if the FF is going to breakout above the 50% channel line, or bounce down.

To review, a breaking of the 0% channel line (the lower trend line) is thought to be very bearish. 

The PPT doesn't even know about the FF, but seems like they will defend it anyway.  Time will tell.   Governments are reactionary, they define the herd, usually taking the worst action at the perfectly wrong time. 

Interventionists that are thinking that they can break a business cycle are perhaps the most dangerous of them all.  Some say the US pumped about $13T into the money supply in order to eek out a few hundred billion in GDP gain (compared to an abysmal previous year).  

Not a good return on investment.

For the moment though, I can't be bearish on equities.   I still hold some puts and 2X short, but hedged with long futures.

However that said....trend changes after moons can take several days to play out, so just like the EUR/USD currency pair did a massive ramp and then dump, we could have the same effect on equities. 

Tuesday, February 16, 2010

Greece and Bombs

A bomb was reported to be set off in a JP Morgan building in Greece.   "They" called 30 minutes ahead of time to there was no human death.

But just do a Google search, there is a history of bomb attacks in Greece in general, but also in particular, of financial institutions.

Just pointing this out.   We don't condone violence as a solution, but we do think there is more of this to come.

From a recent poll

Sunday, February 14, 2010

McClellan -- Small Change

This, together with the large number of charts "ready to breakout", really indicate a large price move coming.   We just don't know the direction, although only a paranoid bear would not think that the main trend is now down.