...Only Laughter.
Until Gold is no longer considered a "risky investment", I fear we will have to put up with the bull shit we endured today. No further comment today.
GOLD RESISTANCE: 664 / 668 / 672
GOLD SUPPORT: 662 / 660 / 654
SILVER RESISTANCE: 12.93 / 13.04 / 13.15
SILVER SUPPORT: 12.81 / 12.75 / 12.60
Tuesday, July 31, 2007
It's Gold Season!
Dow Surges 93 Points After Pullback
NEW YORK (AP) -- Wall Street found a foothold Monday as investors, still anxious that a credit crunch could crimp U.S. growth, took advantage of low prices after last week's steep losses. The Dow Jones industrial average surged more than 90 points.
Yeah right, "Surges". The Dow spent most of the day trying to decide whether it should go down further, or hop on the cats back after it hit the pavement. The 93 point "surge" was a tiny bit of short covering...and that's it.
Gold and Silver didn't "surge" higher Monday, but both had solid bounces. Whether my prediction last Thursday that Gold would bounce hard Friday "or" Monday remains to be seen. So far, maybe just an educated guess? It should be noted that both metals solid moves Monday really didn't take hold until the Stock Indexes made up their minds to move higher. Moves even higher in the aftermarket where very impressive.
This morning Gold is attempting a run thru the first Fibonacci resistance line at 668. Recall that 668 proved formidable resistance mid month as Gold rallied higher off the June low. 672 would be the next line of resistance followed 676. 676 could be potentially a battle ground as a great number of paper shorts via the Vermin Of The Comex were spewed on the market towards the end of last week. For more on that please read Dan Norcini's commentary from JSMineset:
Clearly, some powerful entity was opposing the price rise with a vehemence that has not been seen for some time.
Those of us who have seen this drill for the last six years know exactly who that entity is and it was again confirmed today as the COT data was released. Once again, the INCREASE in the new shorts came from the commercial category, which are dominated by the bullion banks. That group alone added a whopping 29,327 new short positions.
This is the largest weekly increase in new shorts in one week since June 2005!
Silver's bounce yesterday mirrored that of Gold, but in percentage terms Silver had a better day. As we move forward in time, and the Fall Precious Metals rally takes root, do not be surprised to see Silver regularly outperform Gold in percentage terms.
This morning Silver has engaged the first Fibonacci resistance line at 12.93. Recall that Silver launched from a dip to 12.93 in mid-July during it's last rally off the June low, and quickly vaulted to 13.49. 13.04 and 13.15, both lines of resistance in last month's rally, again appear to stand in the way of Silver moving higher as we enter August.
Gold "seasonality" starts becoming a positive influence of the metal as we enter August. Adam Hamilton discussed this at length in his July 13 essay Gold Bull Seasonals 2
In late July, in the next couple weeks here, gold tends to bottom and then start powering higher as autumn gold demand builds worldwide. The second big seasonal rally in gold occurs between late July and late September.
With August and September typically weighing in strong in seasonal terms, the obvious implication here is to get long gold, silver, and precious-metals stocks now if you are not already deployed. If late summer buying drives gold higher as usual, the more-speculative silver and precious-metals stocks will follow it up. Investors and speculators alike should take advantage of the seasonally weak summer to add positions ahead of the big seasonal rallies expected in the second half of the year.
Please read the entire essay if you haven't already. Dem Rat Bastids are in for a nasty "Fall".
Adam also posted another exceptional essay this past Friday. Gold and USDX http://www.zealllc.com/2007/goldusdx.htm This is yet another exceptional piece of research done by this guru of gold.
If you are an investor or speculator, this is a very important distinction to understand. Almost everywhere I look today, from CNBC to analysts on the Internet, there is a ubiquitous assumption that the gold bull only exists due to the dollar bear. The logical extension of this flawed idea is that if the dollar does not fall, then gold will not rise. In other words, gold’s fortunes are held hostage to those of the dollar.
Thankfully a careful examination of this chart immediately dispels this false notion. From their respective beginnings in 2001 to their parallel interim extremes of late 2004, gold rose 77% while the dollar fell 33%. Now if the dollar bear was the sole driver of the gold bull, there should have been rough parity between gold’s gains and the dollar’s losses. Instead we saw gold outpace the dollar by about 2.3 to 1.
Thankfully a careful examination of this chart immediately dispels this false notion. From their respective beginnings in 2001 to their parallel interim extremes of late 2004, gold rose 77% while the dollar fell 33%. Now if the dollar bear was the sole driver of the gold bull, there should have been rough parity between gold’s gains and the dollar’s losses. Instead we saw gold outpace the dollar by about 2.3 to 1.
This essay is an absolute MUST READ.
Posted above is a chart I made yesterday while watching the markets to see if "my bounce" was going to occur. And it did...right at 661.50 as the 20 period moving average crossed over the 40 period moving average on the hourly chart of Gold. It was fun to watch. I began then to wonder if this observation may have any predictive value for traders. I opened up the chart to cover that last two months time in hours. What I found was quite revealing. Please click on the chart above to enlarge and see for yourself.
Monday, July 30, 2007
Our Last Look Back?
Asian Markets Bounce Back From Plunge
TOKYO (AP) -- Asian markets bounced back and European stocks edged higher Monday as investors snapped up stocks after last week's global sell-off and reassessed the possible fallout from U.S. housing woes on international markets.
Japan's benchmark Nikkei 225 index inched up 0.03 percent to 17,289.30, after having plunged 2.4 percent Friday. Hong Kong's benchmark Hang Seng index rose 0.8 percent, Singapore's market climbed 1 percent and Australian stocks gained 0.4 percent.
Japan's benchmark Nikkei 225 index inched up 0.03 percent to 17,289.30, after having plunged 2.4 percent Friday. Hong Kong's benchmark Hang Seng index rose 0.8 percent, Singapore's market climbed 1 percent and Australian stocks gained 0.4 percent.
Chinese stocks hit a new record, but Philippine shares slid 1.5 percent.
That's a pretty thin definition of a "bounce", but we'll give them the benefit of the doubt. Over 50 "world" economies are kicking sand in the USA's face. America is a sinking ship in a global pool of liquidity. That pool is swollen with US Dollars, and they're going down the drain. Somehow I just don't envision all these "emerging" economy's allowing themselves to be dragged into the American sewer system. I also believe that these emerging economies will not be scared out of their Gold by a tiny pack of paper pushing vermin Rat Bastids in New York. They laugh at every opportunity to buy Gold with their worthless Dollars when the vermin put it on sale.
Since late January, Gold has traded in a range between 640 and 690. These Comex Vermin have succeeded at nothing but a stalemate. The paper mache ceiling they've pasted together to cap Gold is becoming no match for the concrete floor Gold Investors are placing beneath it...and they know it. Dem Rat bastids have succeeded at nothing but buying more time for their puppet masters. Yeah sure, to date they have "capped Gold". BUT, they have been total failures at pushing the price lower.
I know I have beaten the 2005 vs. 2007 Gold comparison to death, but please allow me to beat on it one more time. I have a feeling this may be the last time we have to "look back" at Gold for a while.
In 2005, dem Rat Bastids were trying to cap Gold at 450. They had a nine month period of success at maintaining a stalemate, and then their paper mache ceiling was smashed like a pinata on Cinco de Mayo. Today, dem Rat Bastids have succeeded in capping Gold at 700 for about 14 months now going back to May 2006. Investors across the globe are all holding broomsticks and bats waiting for a swing at dem Rat Bastids Gold filled pinata. The Vermin's worst fears are about to be realized when the world starts swinging at their pinata all at once. And that day is fast approaching.
Please click on the charts above, courtesy of Stockcharts.com, and follow along.
In June 2005, Gold broke thru it's Spring high downtrend line. It rose to meet it's major downtrend line off it's 455 high. The failure there at resistance resulted in a retest of the June low and subsequent June breakout. Trendline breakouts are often retested before a market powers to new highs. As you can see, following the retest of the June low, Gold moved back to, and thru the major downtrend line in short order, and 450 was soon history. [Also note that the break of that trend line was retested.]
In July 2007, Gold broke thru it's Spring high downtrend line. It too rose to meet it's major downtrend line off it's 730 high. The failure their at resistance has resulted in a retest of the late June '07 low, and July breakout. Could this "dip" in Gold here be it's last "look back" before it powers higher to and thru 700? As always, ...time will tell. It's just fascinating to me how closely 2007 Gold appears to match up to 2005 Gold.
Reaction in Gold following the June 2005 retest mentioned above is worth noting should Gold's retest today of the July Breakout be successful. We could quickly move up too and possibly thru 700. If this should come to pass, keep the party hats under wraps until that 700 breakout is retested...it surely will be. The second move thru 700 will be the beginning of the end of dem Rat Bastids reign of terror in the Gold Markets.
In the interim...forget all this crap about people selling Gold because it's liquid and they can quickly raise cash to cover margin calls in the Stock Market. What FOOL would sell their Gold to protect their over priced and destined to crash positions in the general equity markets. There is no question that margin debt is an issue. Just recently it was reported that margin debt on the NYSE was at an all-time high. Similar reports appeared just before the markets crashed in early 2001. Um, correct me if I'm wrong, but Gold has been all up since 2001, has it not? Up rather substantially I might add. A fool and his money are soon parted. Gold is REAL money. I pity the fool...
Thursday, July 26, 2007
Yen/Gold Ratio, Fascinating...
At 8:30 AM est. the "preliminary" US 2nd quarter GDP number will be released. THIS NUMBER IS BIG. Economic catastrophe or reprieve? A lot of faces will be turning blue in anticipation of the release. +3.2% is the consensus estimate. I won't be holding my breath...
On June 27th, 2007, The Truth Is Out There , I posted the following:
Gold touches 3-month low as investors cut riskWed Jun 27, 2007 6:50AM EDT
http://www.reuters.com/article/hotStocksNews/idUST5734620070627
http://www.reuters.com/article/hotStocksNews/idUST5734620070627
If you recently sold your Gold to "avoid risk", I hope you use your proceeds to pay to have your head examined. Yes Gold is a metal...it is NOT a commodity. If you ask me, the "risk" is having your money sitting in cash. Ahhh, the fool and his money...
Gold opened at 642.70 on June 27th, and moved higher for the next 19 days to reach a high of 687.75 before our current pullback. Those silly "risk averse traders"... selling at the bottom on the 26th... for shame.
And now look, today the risk averse appear to be selling yet again:
LONDON, Jul. 25, 2007 (AFX International Focus) -- Gold extended losses into afternoon trade as the dollar firmed and on a rise in global risk aversion after the equity markets dipped overnight, spooking investors out of commodities and into lower-risk assets such as cash and bonds.
Gold must be near another bottom... In conversation with my broker, Steve Thornburry at Monex, this afternoon, I all but predicted a hard bounce in Gold either Friday or Monday. As I type this, Gold is now $6.30 off today's bottom. And the Yen, after a powerful little rally is in retreat. What do the two have in common? It appears they may have quite a bit. I have been studying the yen charts and the Gold charts all week and kept "seeing" a correlation between the two. I alluded to it briefly in yesterdays post. Today I dug in a little deeper and came up with a chart of the Yen vs. Gold. When the chart popped up for the first time I gasped, "Fascinating". There IS an obvious correlation between the two for the past several months.
Please click on the $YEN:$GOLD chart above to enlarge.
It doesn't take a genius to see what this picture may be saying. Gold may be bottoming as I type this. The green arrows point out "significant" recent Bottoms in gold, while the red arrows point out recent "significant" Tops in Gold. The 200 day moving average of the ratio between the Yen and Gold appears to be a signal that a bottom in Gold may be near, or in. Is past performance a guarantee of the same in the future? No, of course not, but until proven otherwise, this bears watching. Note also that in 2006 0.13 was a signal of a top in Gold. In 2007 the ratio seems to have dropped to 0.12 to indicate a top. Fascinating...
The Yen at this hour is retreating from today's high that coincides with it's major downtrend line and a 61% retracement of the Yen most recent slide from it's March high. That March Yen high coincides exactly with Gold's March low. Fascinating...
Gold at this hour is bouncing hard off it's 50 day moving average AND the 50% retracement of the June - July rally. The Yen is retreating from resistance, and Gold is bouncing off support. The Yen/Gold ratio is at it's 200 day moving average. Fascinating...
Observation, conjecture, argument...all could be proven moot by tomorrow's GDP number. But this Yen/Gold ratio is fascinating nonetheless.
Silver bottomed today right on trendline support off the June low, and a 50% retracement of the June - July rally. Silver looks solid, and may be building a Reverse Head & Shoulders bottom here. If this pattern should unfold, we would have a neckline break somewhere between 13.35 and 13.40. A projected move higher out of just such a bottoming pattern would be 14.60/70.
Like I said the other day, "Be prepared to buy the dip."
Wednesday, July 25, 2007
Fear? NOT!
With absolutely no fundamental reason, or excuse, the US Dollar sprang from the mat and rallied today. Facing a ten-count, and a knockout call, the bounce we have expected for days from the Dollar materialized out of thin air...much like the money the Fed and Treasury conjure up daily. ...And wasn't it amazing how the Dow managed to open 100 points UP this morning?
Can you say PPT to the rescue? Ah, but they couldn't keep the screws to Oil, could they? You see, there are only so many balls even the world's best jugglers can keep in the air at any one time. Slowly but surely these conniving vermin are losing control of that which they so desperately try to control. The Day of Reckoning for these thieves is fast approaching. This "bounce" in the Dollar will amount to little. There is a line of "interests" that now circle the planet waiting to unload their Dollars. An anemic bounce here in late July will just allow that many more to get a better price at this fire sale of the US Dollar.
Gold fought at 677 and then 674 before declaring "enough" at 670. At this "hour" Gold is banging at the downtrend line off Tuesday's 687 high. Gold must maintain it's hold on 670 to avoid further liquidation by weak hands.
Sadly, Silver slipped quickly though support at 13.18 this morning, but stood tall just above 13 at that number again: 13.03. At this "hour" silver has pierced the downtrend line off of Tuesdays high at 13.49. Silver must maintain it's hold on 13 to avoid scaring the weaklings.
Tuesday, July 24, 2007
Yen Kicks Dollar To Curb
On July 16th ...And The Sh*t Hits The Fan I mentioned the demands made by Iran that Japan begin paying for all the Oil they purchase from Iran ONLY in Yen. And I quote: "This is certainly BAD news for the good 'ol greenback, and potentially even worse news for the "Yen carry trade". Keep an eye on this. It should be noted that despite what you hear in the press, funds obtained in the "Yen carry trade" are NOT used to purchase Gold. That would be ridiculous. They are primarily used to purchase higher yielding securities. Can you say "mortgage backed securities"? This demand of Japan by Iran could be the spark that burns that house down. This story should be followed." The Yen has been on a rampage since.
The "Yen carry-trade" has propped up the Dollar for months. It appears the last crutch under the feeble Dollar has been snatched. I'd have expected Gold and Silver to be reaching the upper atmosphere as a result of today's action in the Dollar. Strangely, though in these rigged markets not unexpectedly, they weakened. It would be difficult to blame the drop in Oil prices for the weakness in metals today, but I'm certain it will be used as an excuse by many. Gold and Silver were attacked at the open on their overnight strength again today. The fact that the pressure was able to contain the metals as the Dollar continued to plummet was a bit dismaying. As the metal weakened traders in gold Stocks began to toss their babies out with the bath water as the Stock Market Indexes accelerated lower. I suspect they will soon regret this.
Now, as I was saying... The yen has been used to prop up the Dollar for the past 2 1/2 years. In January 2005 the Yen was crushed to rally the Dollar for the entire year. That 2005 Bear market Rally in the Dollar got way long in the tooth and and was capped as the Yen reached near 82 on it's Index. The Yen rallied for the first half of 2006 as the Dollar tanked and the Precious metals soared. The Yen also rallied from a low of 82 in late January that coincided with Gold's Spring run up near $700. Could a Yen rally launching now, lead to new highs in Gold and Silver over the next 6-9 months? And new lows for the Dollar? Stay tuned...
Monday, July 23, 2007
Buy The Dips
Crude Oil Falls on Expectations of Rising U.S. Gasoline Stocks
http://www.bloomberg.com/apps/news?pid=20601087&sid=ay.9_lAYC2Ss&refer=home
Crude oil fell a second day in New York on signs U.S. fuel stockpiles may increase as refiners increase output.
Crude Oil Falls After Report of OPEC Concern Over High Prices
http://www.bloomberg.com/apps/news?pid=20601082&sid=aACjkXOhn.s0&refer=canada
Crude oil fell after Reuters reported the Organization of Petroleum Exporting Countries was concerned about high oil prices and their impact on the world economy.
The group may pump more oil to increase supplies, though it's unclear whether extra production will be needed this year, OPEC President Mohamed al-Hamli said, according to Reuters.
There is little evidence so far that high energy costs have affected economic growth, al-Hamli, who is also the United Arab Emirates' oil minister, told Reuters in an interview yesterday. Adjusted for inflation and a weaker dollar, crude is no higher than it was three decades ago, al-Hamli said.
$100 Oil Price May Be Months Away, Say CIBC, Goldman
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYjwn7IqTlHQ&refer=home
``We're only a headline of significance away from $100 oil,'' said John Kilduff, an analyst in the New York office of futures broker Man Financial Inc. ``The unrelenting pressure of increased demand has left the market a coiled spring.''
The failure of near-record fuel prices to restrain global oil demand growth is what concerns Rubin, chief strategist at the brokerage unit of Canadian Imperial Bank of Commerce in Toronto.
``Prices have doubled, and demand is alive and well and accelerating,'' Rubin said in a July 18 interview. ``The argument that rising prices would choke demand and bring increased output is falling to the wayside.''
Gasoline pump prices averaging more than $3 a gallon across the U.S., the consumer of 25 percent of the world's oil, haven't dented sales. Deliveries of gasoline were a record 9.23 million barrels a day in the first half of this year, according to a July 18 report from the American Petroleum Institute in Washington.
The average cost of oil used by U.S. refiners was $35.24 a barrel in 1981, according to the Energy Department, or $79.67 in today's dollars.
How many times has the price of Oil dropped on "expectations" of rising US gasoline stocks? How many times have these "expectations" not even materialized into higher stocks? LOL, just last week refining capacity rose and gasoline stocks fell. Oil is down on profit taking, pure and simple, and the mouthpieces of the market place are trying to talk it down further. Good luck!
Oil is clearly overbought. Oil will most likely react back to it's 50 day moving average before continuing on it's trek to $80. The reaction, which if given time, should coincide with a 38% retracement [70.50] of Oil's current leg up from it's May low around 61. The path of least resistance for Oil going forward is up.
Gold and Silver, butting up against downtrend lines at last weeks close, slipped a tad today as most commodities fell with Oil. Interestingly enough dem Rat Bastids on the Comex raided both right out of the box at the open today. The US Dollar was again pitiful today, and was up a couple pips on the back of weakness in Oil and nothing else. Though a tiny rally in the Dollar should be expected considering it's technicals...the blip it will put on the chart should prove to be insignificant.
Gold should be protected to the downside at 677 and 674. And Silver should find support beginning at 13.18. Silver will be hard pressed until it can dispense with the shorts at 13.35. With the powerful rally in Precious Metals stocks, we are now in "buy the dip" mode in Gold and Silver. BE PATIENT! Gold historically establishes a bottom at the end of July. That is not to say we are going back to the June lows, just that with a dip here and a higher low we will have "established a bottom".
http://www.bloomberg.com/apps/news?pid=20601087&sid=ay.9_lAYC2Ss&refer=home
Crude oil fell a second day in New York on signs U.S. fuel stockpiles may increase as refiners increase output.
Crude Oil Falls After Report of OPEC Concern Over High Prices
http://www.bloomberg.com/apps/news?pid=20601082&sid=aACjkXOhn.s0&refer=canada
Crude oil fell after Reuters reported the Organization of Petroleum Exporting Countries was concerned about high oil prices and their impact on the world economy.
The group may pump more oil to increase supplies, though it's unclear whether extra production will be needed this year, OPEC President Mohamed al-Hamli said, according to Reuters.
There is little evidence so far that high energy costs have affected economic growth, al-Hamli, who is also the United Arab Emirates' oil minister, told Reuters in an interview yesterday. Adjusted for inflation and a weaker dollar, crude is no higher than it was three decades ago, al-Hamli said.
$100 Oil Price May Be Months Away, Say CIBC, Goldman
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYjwn7IqTlHQ&refer=home
``We're only a headline of significance away from $100 oil,'' said John Kilduff, an analyst in the New York office of futures broker Man Financial Inc. ``The unrelenting pressure of increased demand has left the market a coiled spring.''
The failure of near-record fuel prices to restrain global oil demand growth is what concerns Rubin, chief strategist at the brokerage unit of Canadian Imperial Bank of Commerce in Toronto.
``Prices have doubled, and demand is alive and well and accelerating,'' Rubin said in a July 18 interview. ``The argument that rising prices would choke demand and bring increased output is falling to the wayside.''
Gasoline pump prices averaging more than $3 a gallon across the U.S., the consumer of 25 percent of the world's oil, haven't dented sales. Deliveries of gasoline were a record 9.23 million barrels a day in the first half of this year, according to a July 18 report from the American Petroleum Institute in Washington.
The average cost of oil used by U.S. refiners was $35.24 a barrel in 1981, according to the Energy Department, or $79.67 in today's dollars.
How many times has the price of Oil dropped on "expectations" of rising US gasoline stocks? How many times have these "expectations" not even materialized into higher stocks? LOL, just last week refining capacity rose and gasoline stocks fell. Oil is down on profit taking, pure and simple, and the mouthpieces of the market place are trying to talk it down further. Good luck!
Oil is clearly overbought. Oil will most likely react back to it's 50 day moving average before continuing on it's trek to $80. The reaction, which if given time, should coincide with a 38% retracement [70.50] of Oil's current leg up from it's May low around 61. The path of least resistance for Oil going forward is up.
Gold and Silver, butting up against downtrend lines at last weeks close, slipped a tad today as most commodities fell with Oil. Interestingly enough dem Rat Bastids on the Comex raided both right out of the box at the open today. The US Dollar was again pitiful today, and was up a couple pips on the back of weakness in Oil and nothing else. Though a tiny rally in the Dollar should be expected considering it's technicals...the blip it will put on the chart should prove to be insignificant.
Gold should be protected to the downside at 677 and 674. And Silver should find support beginning at 13.18. Silver will be hard pressed until it can dispense with the shorts at 13.35. With the powerful rally in Precious Metals stocks, we are now in "buy the dip" mode in Gold and Silver. BE PATIENT! Gold historically establishes a bottom at the end of July. That is not to say we are going back to the June lows, just that with a dip here and a higher low we will have "established a bottom".
Sunday, July 22, 2007
Let The Pictures Do The Talking
Sometimes a picture(s) can be worth more than words. Today, the pictures tell the story.
Please click on each chart to enlarge.
Thursday, July 19, 2007
Save Yourself! Buy Gold, Buy Silver!
How can the stock markets be up again today? It is astonishing, this feat of magic. I stand aside with only my mining shares and watch in amazement. The mining shares were up yesterday and today. They were up twice as much yesterday, when the market was down, than they were today when it was up. The Gold Bull has awakened! His Truthsayer firmly in the saddle, "Save yourselves! Buy Gold and Silver!"
Chinese Economy Grows by 11.9 Pct in 2Q
BEIJING (AP) -- China's booming economy accelerated in the second quarter to its fastest growth rate since 1995, driven by surging exports and investment, according to data reported Thursday.
The government said it will take new steps to control the boom.
My first thought was of the call for a "slowing demand for copper" after China reported it's first quarter GDP and their government said then they would take steps to "control the boom". Does anybody believe "new" steps will have any more effect? China is a runaway train. I doubt even the collapse of the US Economy will derail it. 11.9% spells an increase in commodities demand to me. Including Gold and Silver. AND OIL. The price of Oil in New York at this hour is $76.
I am so confused...what happened to the days where the losses in the stock market were blamed on rising Oil prices? The lambs are being led to slaughter. If you're not using this opportunity to exit all your American stock positions [except for your mining and resource stocks] and BUY as much Gold and Silver as you can afford you're doomed to go down with the herd. The day of financial reckoning is fast approaching.
Gold powered forward again today and banged head first into the major downtrend line I mentioned yesterday at 677. This is going to be interesting. Absent Friday's UK GDP report there is little economic data on tap for tomorrow. The numbers there are sure to roil the markets in some way, shape or form. The Euro is a bit tired up here. I would not be surprised if the week ended on a bit of a reaction in the metals. Of course, if Oil stays firm or continues higher, the metals may remain firm as we close out the week.
Above I have posted a weekly chart of spot Gold. Please click on it to enlarge. The "Big Picture" of Gold is quite telling. From the Bull's point of view here, he hasn't even spotted the red cape yet. The weekly chart of Gold gives you some idea of how much room the Bull "potentially" has to run from here should we crack $682. Be wary should we crack 682 and run next week. Next week is the last "full" week of July. We have to start thinking about the September contract rollover period as we enter August. It is very possible we may see tradeable highs in both Gold and Silver next week...though momentum may carry us into the first "full" week of August. Expect the wall to go up at $700 again. But don't be surprised if it's "paper thin".
Silver has overhead downtrend resistance around 13.35 on both the Daily and Weekly chart. Cracking 13.35 should bugger the shorts. You'll know they have their hands around their ankles if we get a .30+ pop as we move thru that area. Silver, like Gold, may begin to encounter turbulence as the September futures contract rollover period begins...have a plan of action should this come to pass.
The Dollar remains hanging from a cliff. Reminds me of Gandalf in The Fellowship Of The Ring when he's hanging from the cliff after defeating the "fire monster" and he gasps, "Run you fools!" The Dollar right now is so ugly you just want to stare at it. Beware the Dollar. Sell the rumoured demise of the Dollar, buy the news of it? Perhaps, we shall see...
Begin to watch the Gold price in Euros. You can see it here vs the price in Dollars:
http://www.kitco.com/gold_currency/charts.htm?EURO when the price of Gold in Euros cracks 500 Euros we may see $700 gold fall by the wayside.
Wednesday, July 18, 2007
...And The Sh*t Hits The Fan
MSNBC - 21 minutes agoBy FT reporters Ben Bernanke acknowledged for the first time on Wednesday that credit concerns were spreading beyond the subprime mortgage market as investors showed their worries with a flight to quality, seeking refuge in government bonds and other ...
Dollar wilts as subprime issues weigh Financial Times
There's little more anybody could add to what was said today...the sh*t is hitting the fan people. Every effort will be made to "control" the situation. That became evident late this afternoon as the stock market turned around on a dime. The Exchange Stabilization Fund to the rescue! How much longer can this nonsense last? The Treasury will soon be unable to print money fast enough to stave off a rush towards the exits once the "foreigners" who poured money into the markets on Wall Street the past three months take their ball and go home.
Gold and Silver broke solidly from their recent trading ranges today. The mining stocks put a serious ass whuppin on those foolish enough to still be short in that sector. The Precious Metals Bull has awakened!
Gold hurdled key Fibonacci resistance at 668 today, and as expected found a new cap at June's highs around 673. A break of a major downtrend line looms ever closer near 677. RSI remains supportive of a move higher at this time.
Silver hurdled key Fibonacci resistance today at 13.05 and 13.10. Keep a close eye on Silver's RSI as it approaches the downtrend line there off of April's highs. RSI is a leading indicator, and a downtrend break there often proceeds and predicts a downtrend break in price within days. I suspect that there is a bevy of shorts in Silver at 13.33ish and they will be screaming if Silver takes out the March downtrend line and the June highs simultaneously. Be long and strong should this occur.
With these moves today both Gold and Silver have turned old resistance into new support. Gold is now supported first at 668. For Silver, initial support comes in between 13.05 and 13.10.
With all that has been happening the past 48 hours, the "Yen carry trade" has seldom been mentioned. An interesting development late last week that may have slipped under your radar was Iran's demand that Japan now pay for ALL of their Oil purchased from Iran in Yen ONLY. This is certainly BAD news for the good 'ol greenback, and potentially even worse news for the "Yen carry trade". Keep an eye on this. It should be noted that despite what you hear in the press, funds obtained in the "Yen carry trade" are NOT used to purchase Gold. That would be ridiculous. They are primarily used to purchase higher yielding securities. Can you say "mortgage backed securities"? This demand of Japan by Iran could be the spark that burns that house down. This story should be followed.
For an excellent essay on the current Oil Market a MUST read is this essay by Gary Dorsch:
How High Can Crude Oil Fly?
Now in a very interesting turn of events, Ayatollah Khamenei is demanding that Tokyo pay for its Iranian oil imports in Japanese yen, rather than US dollars. The request for payment of Iranian oil payments in yen is believed to be part of Tehran’s fear of a possible seizure of its assets by the US government amid tensions over its nuclear weapons program. So far, the dollar has shown little reaction to the Ayatollah’s latest gambit, holding steady above 122-yen.
Japanese oil imports from Iran have fallen sharply to 323,000 bpd in May 2007, from roughly 532,000 bpd in 2005. Still, with the cost of OPEC’s benchmark crude oil basket spiraling upwards to a record high of 8,800 yen per barrel, Japanese oil imports from Iran would cost around $10 billion to $12 billion per year. That could make life a bit more difficult for “yen carry” traders, speculating in global markets.
Gary details a lot of what goes on behind the scenes in the OPEC world, and why the price of oil is rising steadily. Goldman Sachs yesterday predicted $95 Oil by the end of the year. I highly recommend reading Mr. Dorsch's essay in it's entirety.
Tuesday, July 17, 2007
Poppycock!
WASHINGTON (MarketWatch) - Wholesale prices fell 0.2% in June as food and energy prices declined after four months of hefty increases, the Labor Department reported Tuesday. The producer price index fell for the first time since January, confounding economists' expectations for a 0.2% increase in prices for goods at the wholesale level. The PPI is up 3.3% in the past 12 months. Food prices sank 0.8%. Energy prices fell 1.1%. Excluding volatile food and energy prices, the core PPI rose 0.3%, a tenth higher than the 0.2% gain expected. The larger-than-expected gain in core prices was largely due to large increases in car and truck prices.
The spin is dizzying. PPI supposedly fell in June as food and energy prices declined, but "core" PPI, which excludes volatile food and energy prices, rose. I thought "core" prices were the "real" measure of inflation? I guess that's only true when "core" prices fall. This goes beyond being a joke now. How can you use food and energy prices to explain the fall in wholesale prices one month and then use them as an excuse the next month when prices rise. This folks is what we call bull shit where I come from.
TIC flows reported today should have been Dollar positive...they were not. Foreigners seem to be buying a lot of corporate debt over here, and stocks. Guess they gotta spend all those Dollars somewhere.
Oil prices were screaming higher out of the box this morning and knocked down $75. A nice round number. Oil prices are clearly overbought now, and the quick retreat this afternoon could legitimately be attributed to "profit taking". The speculators are running wild right now in the Oil futures market. Of course, let us not forget that tomorrow is our weekly visit from the "crude oil supplies" statisticians. Oil would do well to consolidate some here and take off some of the froth there.
Despite the dizzying spin of the PPI numbers the US Dollar remained adrift on the edge of a waterfall. This, of course held Gold and Silver at bay...stuck in neutral. The longer the metals remain running in place the more likely dem Rat Bastids will pull a bear raid on us and try and scare out the weak bulls. I doubt their success should they attempt such folly. Support for Gold remains at 664 and 658. Support for Silver remains at 12.92 and 12.78. I expect little explosive action in the metals until the Gold/Silver ratio breaks below 49.
Perhaps Wednesday's CPI numbers will be a bit more telling and dramatic. Strangely both CPI and Core CPI are pegged at 0.2% as consensus. I guess we'll expect the core number to be up and ignored...LOL, that would be too much. We also get Building Permits and Housing Starts today...how they can be anything but anemic escapes me, but it is 1984. And don't forget! Capt. Bernanke testifies before Congress todayand Thursday. How much longer can this man's nose grow?
The spin is dizzying. PPI supposedly fell in June as food and energy prices declined, but "core" PPI, which excludes volatile food and energy prices, rose. I thought "core" prices were the "real" measure of inflation? I guess that's only true when "core" prices fall. This goes beyond being a joke now. How can you use food and energy prices to explain the fall in wholesale prices one month and then use them as an excuse the next month when prices rise. This folks is what we call bull shit where I come from.
TIC flows reported today should have been Dollar positive...they were not. Foreigners seem to be buying a lot of corporate debt over here, and stocks. Guess they gotta spend all those Dollars somewhere.
Oil prices were screaming higher out of the box this morning and knocked down $75. A nice round number. Oil prices are clearly overbought now, and the quick retreat this afternoon could legitimately be attributed to "profit taking". The speculators are running wild right now in the Oil futures market. Of course, let us not forget that tomorrow is our weekly visit from the "crude oil supplies" statisticians. Oil would do well to consolidate some here and take off some of the froth there.
Despite the dizzying spin of the PPI numbers the US Dollar remained adrift on the edge of a waterfall. This, of course held Gold and Silver at bay...stuck in neutral. The longer the metals remain running in place the more likely dem Rat Bastids will pull a bear raid on us and try and scare out the weak bulls. I doubt their success should they attempt such folly. Support for Gold remains at 664 and 658. Support for Silver remains at 12.92 and 12.78. I expect little explosive action in the metals until the Gold/Silver ratio breaks below 49.
Perhaps Wednesday's CPI numbers will be a bit more telling and dramatic. Strangely both CPI and Core CPI are pegged at 0.2% as consensus. I guess we'll expect the core number to be up and ignored...LOL, that would be too much. We also get Building Permits and Housing Starts today...how they can be anything but anemic escapes me, but it is 1984. And don't forget! Capt. Bernanke testifies before Congress todayand Thursday. How much longer can this man's nose grow?
US Dollar -- One UGLY Duckling
I was going to post about the US Dollar today, but Clive Maund's piece posted on Kitco yesterday says everything for me: http://www.kitco.com/ind/maund/jul162007.html
Our tactics are now clear - watch for a weak countertrend rally in the dollar over the short-term, meaning over the next week or maybe two, that will probably result in a reaction in the Precious Metals and PM stocks, which there is certainly scope for technically after the significant rally of the past several weeks, and use it as an opportunity to load up across the board in gold and silver and Precious Metals stocks. The latest COT figures are suggesting a short-term reaction is likely. This will probably be the last chance to take positions at favorable prices before the anticipated major uptrend gets underway.
I agree. I've posted a chart above of the Dollars recent foibles. Clearly it is oversold. Add to that the rising bashing of it in the media and we have all the makings of a rally in the Dollar. I know, nobody should be buying the Dollar. But we all know nothing goes straight up, or straight down.
A Fibonacci Retracement of the Dollars recent nose dive pretty much cues us into a temporary bottom in the Dollar here. And a mini-rally up to 38% in the 81.50 area would be probable. Will we get that kind of action is another story. The Dollar is woeful at best, and this morning we have June PPI numbers. My suspicion is that the holy "core inflation" may shock people today. Costs of energy and raw materials have been steadily rising now...for most of the second quarter in fact. These costs eventually have to begin to show up in the cost to manufacture goods, which is what PPI measures. Rising producer costs are going to further pressure corporate profits. A lot of hot air may be about to escape the Stock Market Indexes.
Of course were this scenario in the PPI to play out today it's not likely the Dollar will begin a rally anytime soon. But should the Dollar move higher from here and pressure Precious Metals, remain vigilant as any reaction in the metals here should be brief...and an excellent opportunity to "load the boat" if you haven't already.
Gold and Silver are wrestling with support this morning as the world sits on pins and needles awaiting the PPI report. I've included an hourly chart of Gold covering our run up of the low earlier this month. Consolidation looks to be the name of the game for the past couple trading days. 664 support are is where we're at now with what should be solid support around 658. I still maintain that based on the daily charts, surprise moves in Gold, and Silver, remain to the upside.
Silver, always a basket case appears to be holding it's own here at this hour around 12.90. Solid support below at 12.78. Silver will take it's cue from Oil, and Oil looks strong again today trading at 74.68 + .53 as I type this.
PPI coming up within the half hour. "Core" consensus is 0.2%. It would not shock me if it came in double that at 0.4%. It would certainly shock Wall Street. I'm giddy with anticipation.
Monday, July 16, 2007
Silver At The Crossroads
Thursday's spin----
Stocks Hit Records on Retail News
AP - Stocks surged Thursday, carrying the Dow Jones industrials into record territory as investors gleaned some positive consumer spending trends from retailers' generally sluggish June sales reports.
Friday's reality----
Retail Sales Take Steep Fall
AP - Consumers put away their wallets in June, sending retail sales crashing by the sharpest amount in nearly two years. The Commerce Department reported Friday that retail sales fell by 0.9 percent last month, the biggest drop since August 2005.
AP - Stocks surged Thursday, carrying the Dow Jones industrials into record territory as investors gleaned some positive consumer spending trends from retailers' generally sluggish June sales reports.
Friday's reality----
Retail Sales Take Steep Fall
AP - Consumers put away their wallets in June, sending retail sales crashing by the sharpest amount in nearly two years. The Commerce Department reported Friday that retail sales fell by 0.9 percent last month, the biggest drop since August 2005.
If it wasn't so sad it would be amusing. Corporate profit reporting for the second quarter begins in earnest this week. It will be even more amusing to to witness the spin cycles as they polish the turds. The weatherman is in for a pasting...
The Dollar is under pressure and Oil is trading over $74 this morning as I type this. Gold and Silver remain stuck in neutral. How much longer can these two "lights of truth" be kept in the dark by dem Rat Bastids? We may not have long to wait.
Gold enters day three above 664 and looks eager to stretch it's legs a bit as it catches the scent of the June high at 672. The cartel is fighting to hold Gold here near the 50% Fib retracement off the April highs near 700. 672 not only is the June high but the 38% Fib line of the April high. The cartel will attempt to cap Gold their next should we break free of this 666 - 668 area. If we can beat them there, we will have to face them in earnest at the downtrend line around 682. The cartel's Family Jewels will be on the line there. Downside risk here appears limited and should find solid support around 660.
Silver finds itself at crossroads this week as its 50 and 200 day moving averages converge with the neckline of a Head & Shoulders Top. Silver has risen from below this neckline in an attempt to negate it. Shorts will be emboldened here, but should be very wary of the convergence of the 50 and 200 day moving averages. Historically, the convergence of these two averages have been excellent buying opportunities. Not only in Silver, but in Gold as well. Silver's 50 day moving average last slipped below its 200 day in August of 2005. We are below it now. If history is any measure we will not be below it long. I have documented the low in the Summer of 2005 several times here. We all know what followed that low. And we're all anxious for the same to follow this Summer's low. A strong move thru 13.25 and the neckline could possibly be the catalyst we need for just such a move. Protection to the downside in Silver begins at 12.92 and continues at 12.78.
I suspect there will be one more brief dip in Gold and Silver before we Steamroll dem Rat Bastids and there Vermin friends across the globe. When and if that happens is impossible to tell given the tactics of our enemy. But is important to steel yourself against it, and to spit in the faces of these thieves if they try and steal your positions. Their days are numbered.
For an excellent and insightful read on the seasonality of this Gold Bull Market please read Adam Hamilton's Gold Bull Seasonals 2: http://news.goldseek.com/Zealllc/1184342632.php
Thus gold’s bull-market seasonals greatly increase the probability for success for long positions in the second half of the year starting in late July. From August to early February, traders have the opportunity to ride two of the three big seasonal rallies including the biggest by far that starts in October. While it remains to be seen if gold will reasonably mirror its established pattern for the rest of this year, it sure has been mirroring it fairly well since last October. I sure wouldn’t bet against these seasonal tendencies today.
Adam's research and charts of Gold are second to none. I read his work at Zeal Intelligence weekly http://www.zealllc.com/ . His archives of essays will keep you busy for hours. Please stop by an visit his website.
Another Must read is The Birth/Death Ratio by the respected John Mauldin http://news.goldseek.com/MillenniumWaveAdvisors/1184511660.php This piece will open your eyes...as many of his essays often do.
Friday, July 13, 2007
CONfidence?
The biggest con job in financial history is presently being perpetrated on the unsuspecting investing public [aka sheep, as in being lead to slaughter]. What we saw in the stock market "indexes" yesterday was a colossal short squeeze and not the economic nirvana we were lead to believe it represented by the blathering talking heads on sheep vision TV. How any of yesterday's "news" could be construed as being economically positive and bullish for the general stock market escapes me.
Stocks Hit Records on Retail NewsAP -
Stocks surged Thursday, carrying the Dow Jones industrials into record territory as investors gleaned some positive consumer spending trends from retailers' generally sluggish June sales reports.
Alcan Finds a $38B White Knight AP
Manhattan Parking Spot For Sale. Price: $225,000 CNNMoney.com
Stores Post Lackluster Sales in June AP
Trade Deficit Up Significantly AP
Market Overview: Thu 12:30 PM ET Briefing.com
These are the headlines from Yahoo Finance yesterday at 12:30PM. Stocks hit new highs on retail news? What news? Just in these headlines alone I see the words sluggish and lackluster used to describe June's retail sales. I see that the trade deficit rose AGAIN and significantly. A parking spot for sale for $225k? ...Inflation? Let's look inside the headlines...
NEW YORK (AP) -- Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials to record highs as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.
But investors, heartened by signs of a happy and spending consumer, clearly decided to put some money on the table. Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, and the outlook for the coming months was difficult to ascertain, the overall reading wasn't as dour as some investors expected.
"The kind of disaster situation that everybody was preparing for doesn't seem to be playing out."
Stocks' ascent Thursday after at times indecisive trading in recent weeks could also reflect so-called short covering. Investors who sell stocks short are betting the stock will fall and in cases where the stocks rise, such investors are often forced to move in and buy stocks to limit their losses.
Oh my! Is that some truth being revealed by the media, perhaps a disclaimer for their misleading story headline? I don't need to list here now all the reasons stocks should not be going up. But I will mention one: The price of Oil. In a posting on June 3, 2007 I made the case that there is a reverse correlation between Oil prices and stock prices. I predicted that a break above $67 in Oil would push stocks down. Oil has been above $67 for a month now and stocks are at new highs?
Yes, stocks are at new highs because the Fed and Treasury have to keep stocks up no matter the cost. Foreign inflows into the stock market is the last crutch these Financial Cesar's have left to lean on. Their house of cards is about to be blown down in a financial hurricane of epic proportions. "Perception is reality." The Fed and Treasury have to convince the sheep that all is well so that they will continue to run out the door to Wal-Mart with their credit cards and buy some more gizmos and doo-dads made in China so that retail sales "look" strong. Put on a happy face people, Uncle Sam is looking after you...as he leads you to financial ruin.
So the Fed and Treasury print up some cash and distribute it to all the "big brokers" on Wall Street with orders to buy: "We're going to run the shorts today boys. The sheep will think the stock market is going to the moon and join the party. Weeeeeee...." How sad this is...the desperation of it. If you are invested in stocks, other than resource and mining, you should be using to sell out now. A light bulb always burns brightest just before it burns out. Early corporate profit reports for the second quarter have not been encouraging. The Fed is trying to stay ahead of the ball here and give the illusion that all is well.
A lot of folks have shorted the general stock markets for many obvious reasons. It's as hard to sell the top as it is to buy the bottom. As precious Metals traders we know this all to well. It is especially difficult if the markets we're trading are being "influenced" by a cadre of Financial Cesar's attempting to stave off their destruction. The harder these fools try to stop the inevitable, the worse the inevitable will be when it comes to pass.
But hey, this is all good for Gold and Silver! Of course today's Retail Sales reports could be "supportive" of yesterday's "news". But since these numbers reflect Dollars "spent" and not volumes of goods sold, one wonders. If the price of gasoline declined last month [it did], retail sales numbers may be weaker than expected. Just as last month the high price of gasoline made the number better than expected. The Dollar is closer to the abyss today than it was yesterday, but very oversold nonetheless, and a small bear market rally could be in the offing near-term. Just a thought as Gold and Silver mover ever closer to another "breakout" attempt. It is imperative that the cartel contain the precious metals. Gold is the truthsayer...and the truth will be told.
Surprises in Gold and Silver should still remain to the upside. Any surprises to the downside should be contained between 660 and 657 for Gold, and between 12.90 and 12.75 in Silver.
Retail Sales numbers will be out in minutes...this could be interesting.
Stocks Hit Records on Retail NewsAP -
Stocks surged Thursday, carrying the Dow Jones industrials into record territory as investors gleaned some positive consumer spending trends from retailers' generally sluggish June sales reports.
Alcan Finds a $38B White Knight AP
Manhattan Parking Spot For Sale. Price: $225,000 CNNMoney.com
Stores Post Lackluster Sales in June AP
Trade Deficit Up Significantly AP
Market Overview: Thu 12:30 PM ET Briefing.com
These are the headlines from Yahoo Finance yesterday at 12:30PM. Stocks hit new highs on retail news? What news? Just in these headlines alone I see the words sluggish and lackluster used to describe June's retail sales. I see that the trade deficit rose AGAIN and significantly. A parking spot for sale for $225k? ...Inflation? Let's look inside the headlines...
NEW YORK (AP) -- Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials to record highs as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.
But investors, heartened by signs of a happy and spending consumer, clearly decided to put some money on the table. Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, and the outlook for the coming months was difficult to ascertain, the overall reading wasn't as dour as some investors expected.
"The kind of disaster situation that everybody was preparing for doesn't seem to be playing out."
Stocks' ascent Thursday after at times indecisive trading in recent weeks could also reflect so-called short covering. Investors who sell stocks short are betting the stock will fall and in cases where the stocks rise, such investors are often forced to move in and buy stocks to limit their losses.
Oh my! Is that some truth being revealed by the media, perhaps a disclaimer for their misleading story headline? I don't need to list here now all the reasons stocks should not be going up. But I will mention one: The price of Oil. In a posting on June 3, 2007 I made the case that there is a reverse correlation between Oil prices and stock prices. I predicted that a break above $67 in Oil would push stocks down. Oil has been above $67 for a month now and stocks are at new highs?
Yes, stocks are at new highs because the Fed and Treasury have to keep stocks up no matter the cost. Foreign inflows into the stock market is the last crutch these Financial Cesar's have left to lean on. Their house of cards is about to be blown down in a financial hurricane of epic proportions. "Perception is reality." The Fed and Treasury have to convince the sheep that all is well so that they will continue to run out the door to Wal-Mart with their credit cards and buy some more gizmos and doo-dads made in China so that retail sales "look" strong. Put on a happy face people, Uncle Sam is looking after you...as he leads you to financial ruin.
So the Fed and Treasury print up some cash and distribute it to all the "big brokers" on Wall Street with orders to buy: "We're going to run the shorts today boys. The sheep will think the stock market is going to the moon and join the party. Weeeeeee...." How sad this is...the desperation of it. If you are invested in stocks, other than resource and mining, you should be using to sell out now. A light bulb always burns brightest just before it burns out. Early corporate profit reports for the second quarter have not been encouraging. The Fed is trying to stay ahead of the ball here and give the illusion that all is well.
A lot of folks have shorted the general stock markets for many obvious reasons. It's as hard to sell the top as it is to buy the bottom. As precious Metals traders we know this all to well. It is especially difficult if the markets we're trading are being "influenced" by a cadre of Financial Cesar's attempting to stave off their destruction. The harder these fools try to stop the inevitable, the worse the inevitable will be when it comes to pass.
But hey, this is all good for Gold and Silver! Of course today's Retail Sales reports could be "supportive" of yesterday's "news". But since these numbers reflect Dollars "spent" and not volumes of goods sold, one wonders. If the price of gasoline declined last month [it did], retail sales numbers may be weaker than expected. Just as last month the high price of gasoline made the number better than expected. The Dollar is closer to the abyss today than it was yesterday, but very oversold nonetheless, and a small bear market rally could be in the offing near-term. Just a thought as Gold and Silver mover ever closer to another "breakout" attempt. It is imperative that the cartel contain the precious metals. Gold is the truthsayer...and the truth will be told.
Surprises in Gold and Silver should still remain to the upside. Any surprises to the downside should be contained between 660 and 657 for Gold, and between 12.90 and 12.75 in Silver.
Retail Sales numbers will be out in minutes...this could be interesting.
Wednesday, July 11, 2007
It's 8AM: Do You Know What Your Comex Rat Bastid Is Up To?
The chart is simple. It is an hourly chart of Gold going back to the June high around 673. Included are the Fibonacci Lines corresponding to the high and low for the period shown. Please click on the chart to enlarge. The little red circles indicate Comex Rat Bastid Bear Raids at 8AM throughout the month that followed, and through today. There are 15 of them. Notice how many appear at the Fib Lines? Yes, I agree, it's criminal...but what if nobody sold to these jackasses when they pull these stunts?
Just an observation...just a thought.
The BoJ interest rate announcement nears... The US Dollar catches a bid in anticipation of a rate increase that I believe will not come until August at the earliest. Should the BoJ remain on hold, the Dollar might possibly shrivel up and die... It must be miserable to be a US Dollar. Should the BoJ raise, reactions may not be as fierce as one might think. A lot of the downside in June was because of Japanese officials trying to "talk" the yen higher and those fearing "the unwinding of the yen carry trade" foolishly exiting their Gold positions. A rising yen, just like a rising Yuan in China, ultimately will be bad for the already foul US Dollar. And besides...the Yen would still have a rate of less than 1%...and still be the cheapest carry trade around... Blah, blah, blah...go look at yesterday's Monthly Gold chart again...
Tuesday, July 10, 2007
The Cartel Is Terrified
The question of "manipulation" in the Gold market has been asked repeatedly. If ever there was a single day that represented this "capping" of the Gold Price, today may be it. The ever eloquent Dan Norcini over at Jim Sinclair's MineSet http://www.jsmineset.com/home.asp today put into words what many of us have been observing and bitching about for months:
Folks - I have to say that today was one of the most blatant capping efforts I have seen in gold in some time and that is saying something. With the dollar breaking through major support and with crude oil moving up along with the CRB index, to see gold struggle to keep its head above water was almost comical if it weren't so obvious as to what is going on.
You have to wonder what it is about the number "666" that the enemies of gold are so obsessed with holding the gold price below it. I mean, we could not make this stuff up if we wanted to for Pete's sake!
The official sector is so terrified of letting the gold price get away from them that they are making fools of themselves since even the most obtuse are beginning to realize that something stinks to high heaven in the gold market. My own personal view of this is that anyone, and I do not care how well-respected or how well known they are, who denies that there is official sector intervention to keep the price of gold down is willfully blind and has forfeited any right to be listened to when it comes to commenting on gold. I have been a trader for nearly 20 years now and have seen all manners of markets trade and all manners of price action and will state categorically that no other market on the planet trades like the gold market. The price action in gold cannot be explained any other way than by attributing it to official sector intervention.
Market commentary from the usual nitwits to explain gold's weak price action was encapsulated in the view that gold traders were waiting to see what Fed Chairman Bernanke would be saying in his speech at 1:00 PM EST. Oh sure, I get it, traders are concerned about the dollar's reaction to any talk of Fed action on the interest rate front. Meanwhile the dollar falls into a black hole! And to think some people actually get paid to produce this sort of swill...
The friends of gold can rest assured that those who are vainly expending energy and resources into suppressing it are spitting into a hurricane. They should really give it up since they are no longer fooling anyone. Once a ploy becomes widely known, it no longer serves any useful purpose. Screwing around with a yardstick does not mean that one can alter the fact that there are 36 inches in that yard. In the same manner, attempts to alter the barometer of gold have ZERO affect on the conditions that are calling for its inexorable rise higher...
And despite the vigilant efforts of the "gold cartel" to suppress the price of Gold it continues ever higher. As the monthly chart of Gold above clearly shows, since double bottoming in 2001 Gold has RISEN steadily. Since clearing the launch pad at 415 in the Summer of 2005, Gold's ascent has been prominent. Looking at Gold on a monthly chart makes one wonder what all the worrying has been about...powerful bull markets climb a wall of worry.
Gold is not going to stop at the Moon. Gold is going to the heavens. Stage One's ascent following liftoff in the Summer of 2005 has been rewarding for those fortunate enough to be on board when this bird took flight. The smart money, Gold Bugs, and contrarian speculators long ago packed their bags for this trip, and have been picking up supplies on the cheap along the way. The ship is less than half full of passengers at this time. Investors are now queuing up for Stage Two. As Gold breaks the downtrendline of the May 2006 high, Investors will begin fighting for a seat at $682. Since carry on baggage is not permitted for new passengers, these "investors" will be forced to pick up supplies along the way at ever rising prices. Stage One ticket holders stand to benefit immensely from these investors joining the passenger list.
All aboard! Next stop $1045 Gold.
The company's bugler is licking his lips as the US Dollar collapsed today on news of China's trade Surplus. December 2005's low of 80.35 is the cliff the Dollar is fast approaching. If it goes over the edge here, our bugler will be playing taps as the Dollar falls into an abyss below.
Gold and Silver by all rights should have been SUBSTANTIALLY higher today on this collapse in the Dollar. I'm confident it soon will be... 664 Gold was noted here as dem Rat Bastids "last straw". They certainly rose to the occasion today. Silver vaulted 12.75 today and singed the the Vermin and their paper Comex short positions. Silver was capped at the 12.95 50% Fib retracement of the June '07 high. The downtrendline off that same high was clearly broken at 12.75. I suspect we will see only higher lows from here in Silver for the balance of 2007. The 13.10-15 area is our next target. I suspect we may not see a "tradeable" high in Silver prior to the 13.70s.
Begin to focus on the Gold/Silver ratio again. A break below 49 could send both Silver and Gold lurching forward.
Monday, July 9, 2007
Buried in a Landfill Of Debt
What is a country whose GDP is built on a foundation of debt? DOOMED...
AP
May Consumer Borrowing Jumps 6.4 Percent
Monday July 9, 7:09 pm ET
Consumer Borrowing Posts Hefty 6.4 Percent Increase in May, Propelled by Credit Card Debt
http://biz.yahoo.com/ap/070709/consumer_credit.html?.v=11
The Federal Reserve reported Monday that consumer credit rose at an annual rate of 6.4 percent in May, far above the small 1.1 percent gain of April.
The increase was propelled by a surge in the category that includes credit cards, which rose at a rate of 9.8 percent in May after having a tiny increase of 0.2 percent in April. The jump in credit card debt was the largest since a 14.5 percent rate of increase in November.
"April consumer credit surprised us by being weaker than expected, and the May performance was stronger than expected. Probably, the best thing to do is average the two months," Wyss said.
The overall economy, weighed down by a slump in housing, grew at a lackluster rate of 0.7 percent in the January-to-March quarter, the weakest showing in more than four years.
But economists believe strength in employment and consumer spending will help provide a stronger performance in the April-June quarter, with many looking for the gross domestic product to expand at a rate of 3.5 percent or even better.
The report on consumer borrowing will provide support for the view that consumer spending has held up, despite the weakness in home sales and soaring gasoline prices during the spring.
For May, consumers increased their borrowing by $12.9 billion to a record level of $2.44 trillion. Economists had been forecasting that consumer borrowing would rise by a much smaller $6.5 billion.
Strength in employment and consumer spending? LOOOOOOOOOOOOOL!!! The strength in employment is blatantly fictitious and the strength in consumer spending is obviously the result of a multiplying mountain of debt. IMO they should have a new GDP report that is "ex credit card debt". For without the plastic, this country's economy would certainly be going in reverse. These numbers are, and should be, alarming. They should not be trumpeted as "positive for the economy going forward". They certainly didn't lend any aid to the tumbling US Dollar. Rising consumer debt, government debt, corporate debt...never forget: Each and every Dollar is a promise to pay a debt. The world is awash in Dollars, and therefore an insurmountable pile of debt. A pile of debt that will one day bury our nation in despair. Rise above the pile of debt...BUY Gold and Silver.
I stop to ponder...how much of May consumer credit card debt was to purchase food and gasoline. Oh, that's right, I forgot...nobody buys those items. That is why we don't include them in the national Consumer Price Index. What year is it anyway? 1984?
Gold made an impressive move today through 658. Gold tried to break away from da Rat Bastids on the Comex this morning, but was quickly capped at 663...within a whisper of the last straw at 664. Gold and Silver both fell quickly after the Comex open this morning, despite rising Oil prices and a relatively flat Dollar. The Comex Vermin are going to fight furiously and without honor to suppress both Gold and Silver as we move ahead.
Silver made a made dash thru 12.75 to post a high of 12.86 at precisely 8:45AM EST. And battled with the Vermin for the balance of the day to successfully close above it's 65 week moving average and key Fib resistance noted yesterday as well.
Silver was well into the 13s, Gold was trading in the 670s, and Oil was capped at $67 the last time the Dollar was this low in late April. Gold and Silver are wound very tight right now. It should be noted that the MACD on the daily chart of Silver only just crossed over bullish on Friday. Four days after Gold's daily MACD crossed over bullish on the 1st of July. We've only just begun. And what have we begun? The beginning of the end for dem Rat Bastids.
Gold support should begin to firm now at 653, with silver support now at 12.46. Gold may well bang around between 656 and 663 for the balance of the week prior to Friday's Retail Sales Report. Silver may do much the same between 12.62 and 12.80. A consolidation in Oil prices here is/was to be expected with hidden resistance at 73.75. Prices hit 73 on Friday. Oil prices should remain above 70, with solid support at 67-68. Consolidation in Oil prices may not be enough to hold back a rise in the Precious Metals as the metals have some catching up to do. Copper closed above 360 today. Silver and Gold both are lagging Copper. Gold needs to reach 675 just to catchup to Copper now. Could Copper breaching 375 signal a Gold move to 700 is imminent? The Dollar remains at a crossroads here with few friends and little in "economic data" between now and Friday to try and hang it's hat on. Friday's Retail Sales data could be the straw that breaks the Dollars back...but I won't hold my breath. It's 1984...
AP
May Consumer Borrowing Jumps 6.4 Percent
Monday July 9, 7:09 pm ET
Consumer Borrowing Posts Hefty 6.4 Percent Increase in May, Propelled by Credit Card Debt
http://biz.yahoo.com/ap/070709/consumer_credit.html?.v=11
The Federal Reserve reported Monday that consumer credit rose at an annual rate of 6.4 percent in May, far above the small 1.1 percent gain of April.
The increase was propelled by a surge in the category that includes credit cards, which rose at a rate of 9.8 percent in May after having a tiny increase of 0.2 percent in April. The jump in credit card debt was the largest since a 14.5 percent rate of increase in November.
"April consumer credit surprised us by being weaker than expected, and the May performance was stronger than expected. Probably, the best thing to do is average the two months," Wyss said.
The overall economy, weighed down by a slump in housing, grew at a lackluster rate of 0.7 percent in the January-to-March quarter, the weakest showing in more than four years.
But economists believe strength in employment and consumer spending will help provide a stronger performance in the April-June quarter, with many looking for the gross domestic product to expand at a rate of 3.5 percent or even better.
The report on consumer borrowing will provide support for the view that consumer spending has held up, despite the weakness in home sales and soaring gasoline prices during the spring.
For May, consumers increased their borrowing by $12.9 billion to a record level of $2.44 trillion. Economists had been forecasting that consumer borrowing would rise by a much smaller $6.5 billion.
Strength in employment and consumer spending? LOOOOOOOOOOOOOL!!! The strength in employment is blatantly fictitious and the strength in consumer spending is obviously the result of a multiplying mountain of debt. IMO they should have a new GDP report that is "ex credit card debt". For without the plastic, this country's economy would certainly be going in reverse. These numbers are, and should be, alarming. They should not be trumpeted as "positive for the economy going forward". They certainly didn't lend any aid to the tumbling US Dollar. Rising consumer debt, government debt, corporate debt...never forget: Each and every Dollar is a promise to pay a debt. The world is awash in Dollars, and therefore an insurmountable pile of debt. A pile of debt that will one day bury our nation in despair. Rise above the pile of debt...BUY Gold and Silver.
I stop to ponder...how much of May consumer credit card debt was to purchase food and gasoline. Oh, that's right, I forgot...nobody buys those items. That is why we don't include them in the national Consumer Price Index. What year is it anyway? 1984?
Gold made an impressive move today through 658. Gold tried to break away from da Rat Bastids on the Comex this morning, but was quickly capped at 663...within a whisper of the last straw at 664. Gold and Silver both fell quickly after the Comex open this morning, despite rising Oil prices and a relatively flat Dollar. The Comex Vermin are going to fight furiously and without honor to suppress both Gold and Silver as we move ahead.
Silver made a made dash thru 12.75 to post a high of 12.86 at precisely 8:45AM EST. And battled with the Vermin for the balance of the day to successfully close above it's 65 week moving average and key Fib resistance noted yesterday as well.
Silver was well into the 13s, Gold was trading in the 670s, and Oil was capped at $67 the last time the Dollar was this low in late April. Gold and Silver are wound very tight right now. It should be noted that the MACD on the daily chart of Silver only just crossed over bullish on Friday. Four days after Gold's daily MACD crossed over bullish on the 1st of July. We've only just begun. And what have we begun? The beginning of the end for dem Rat Bastids.
Gold support should begin to firm now at 653, with silver support now at 12.46. Gold may well bang around between 656 and 663 for the balance of the week prior to Friday's Retail Sales Report. Silver may do much the same between 12.62 and 12.80. A consolidation in Oil prices here is/was to be expected with hidden resistance at 73.75. Prices hit 73 on Friday. Oil prices should remain above 70, with solid support at 67-68. Consolidation in Oil prices may not be enough to hold back a rise in the Precious Metals as the metals have some catching up to do. Copper closed above 360 today. Silver and Gold both are lagging Copper. Gold needs to reach 675 just to catchup to Copper now. Could Copper breaching 375 signal a Gold move to 700 is imminent? The Dollar remains at a crossroads here with few friends and little in "economic data" between now and Friday to try and hang it's hat on. Friday's Retail Sales data could be the straw that breaks the Dollars back...but I won't hold my breath. It's 1984...
Sunday, July 8, 2007
All The World's A Stage
For Gold, All the World's A Stage...and the stage has been set. The battle between the forces of good and evil in Gold is on. In the words of Bob Chapman, The International Forecaster, "The cartel is in trouble."
Turkey’s gold bullion imports almost tripled in June as the wedding season held forth. That is a 178% increase yoy.
The stage is set for a bitter wage despite in the South African gold mining- sector after employers tabled an offer of a 6% increase compared to demands of 15% to 20% from the main trade unions. The 6% offer doesn’t even match inflation. We do not see an early settlement. Be prepared for at least a one-month strike.
Worldwide gold producers are facing mounting costs and they cannot make money at these gold prices. Central banks and Western governments cause all of these problems. They are increasing money, credit and inflation and simultaneously selling gold into the market. This is not a free market. It is a corporatist, fascist market. Yes, investors and companies get hurt financially, but much worse workers worldwide, who work for mining companies, get hurt much worse. You can see how much the rich elitists care for the common man. These Illuminists are not just hypocrites; they are criminals.
The stage is set for a bitter wage despite in the South African gold mining- sector after employers tabled an offer of a 6% increase compared to demands of 15% to 20% from the main trade unions. The 6% offer doesn’t even match inflation. We do not see an early settlement. Be prepared for at least a one-month strike.
Worldwide gold producers are facing mounting costs and they cannot make money at these gold prices. Central banks and Western governments cause all of these problems. They are increasing money, credit and inflation and simultaneously selling gold into the market. This is not a free market. It is a corporatist, fascist market. Yes, investors and companies get hurt financially, but much worse workers worldwide, who work for mining companies, get hurt much worse. You can see how much the rich elitists care for the common man. These Illuminists are not just hypocrites; they are criminals.
Commodities were strong and copper is about to breakout over $3.60 again to retest $4.00. All those in the pits, especially in London, know there are fully paid warrants claiming between 140% and 169% of the copper in stock. The copper market is soon going into default. Stockpiles have dropped for the 8th consecutive session, falling 2,425 tons or 2.2% to 107,950 tons. This year stocks have fallen 41%.
The Fed can now only stand still and watch. The game is almost over. In four years there may no longer be a Federal Reserve. There game and the game of the other Illuminists will be over. The dollar will soon test 80 and it will break, as interest rates move higher.
The Fed can now only stand still and watch. The game is almost over. In four years there may no longer be a Federal Reserve. There game and the game of the other Illuminists will be over. The dollar will soon test 80 and it will break, as interest rates move higher.
Fridays action in the Precious Metals was very encouraging as the US Dollar failed to catch much of a bid off of the June non-farm payrolls numbers and quickly slipped back underwater boosting the metals. Silver had a remarkable day Friday, closing 38 cents off it's low of the day. Is the rest of the world finally catching on to the farce these non-farm payrolls numbers represent? Dan Norcini over at JSMineset, http://www.jsmineset.com/home.asp , had some wickedly amusing commentary regarding these "bogus" numbers on Friday:
The big market mover today was the monthly exercise in statistical gymnastics by the Labor Department, aka the Payrolls Report. This time around, the pencil pushers – check that – the keyboard pounders – managed to find 132,000 new jobs for the month of June. That surprised the “expert analysts” who had placed their money on the red for an average of 120,000.
In another astounding feat of data prestidigitation the feds managed to “discover” another 33,000 for the month of May as they revised their previous “esteemed accurate count” of 157,000 to 190,000. Not satisfied with that bit of legerdemain they proceeded further on back to April and pulled an extra 42,000 jobs out of their black hats, revising that number upwards from 80,000 to 122,000.
Folks, I have to ask you, how many of us who live in the real world could consistently produce such grossly inaccurate and bumbling reports time after time and still retain our current paid positions in the workforce. Imagine a corporate planning board basing their business strategy off of estimates being created within their own firm that contained this degree of accuracy – off nearly 20% one month and 50% the prior month!
What is perhaps more amazing to me however is that so many people actually believe this swill that the government serves up.
And now, the stage is set. Gold is banging it's head on the downtrendline off of the May high, the 50% retracement of the same May high, and the neckline of a Reverse Head & Shoulders that has developed around the June 26th low simultaneously as I type this Sunday evening. A break and close above 658 may be just what the doctor ordered and light a fire under the shorts in this market. Is a short squeeze imminent? Dem Rat Bastids will not go down without a fight. Look for a marked increase in volatility as Gold attempts to power higher from here. 664 may be the Comex Vermin's last straw before their backs are broken.
Silver's battle for control of it's 65 week moving average continues at this hour. 12.64 is the line we must gain control of if Silver is to move higher. It should be noted that the 65 week moving average coincides with the 38% retracement of the February high off the major low of June 2006. Note also that the last time Silver was below it's 65 week moving average for two weeks running was the low established in August 2005. Silver went parabolic following it's recovery from this major low and ascended to it's highs in the 15's in May 2006. Past performance is no guarantee of future success, but the Summer of 2007 is looking more and more like the Summer of 2005 as each day passes now. The similarities of the two consolidations following major tops in Silver is uncanny. Da Rat Bastids know the consequences if Silver breaks back above today's triangle...their demise. Friday's 12.74 high was our first look at the battle line. I expect the Comex Vermin to fight dirty to hold this line. 13.03 will reappear eventually as the last straw that could break dem Rat bastids backs once and for all this year.
Please click on charts from http://www.usagold.com/live/price-break.html to enlarge.
Thursday, July 5, 2007
Conjunction Junction
Leave it to Jim Willie CB, at GoldenJackass.com to tell it like it is in his most recent piece of eloquence: Garbage Bonds & Bonfires.
Without a doubt the USDollar is the weakest link, as numerous holes must be plugged to in the leaking dike. Gold and silver must be prevented from a zoom rise in price, since they serve as warning signals. Crude oil and natural gas must be prevented from a zoom rise in price, since they directly strain the USDollar. The long-term interest rates must be prevented from jumping higher. The stock market indexes must be prevented from falling sharply, since the public sees stocks as a visible signal of wealth. The USDollar must be prevented from a sudden freefall. The entire Wall Street and US Federal Reserve leadership is in the process of soiling their skivvies. The best investment might be in Depends Adult Diapers.
In the face of a weak link USDollar, a fast eroding Petro-Dollar defacto standard enforced by Persian Gulf principal players, one should expect the crude oil price to hurtle higher. It is doing precisely that. Blame had been put on the Nigerian situation, but that is but a false facade and distorted assessment intentionally given. The links have always been firm between the USDollar and crude oil. The alchemists cannot control them, while at the same time keep their controls in place on the vast price capping required throughout the Western bond world on long-term interest rates.
In time, the push upward in crude oil price will be matched by a push upward in the gold price. The two are strongly correlated. A systemic bonfire has been lit, the effects of which will undermine the confidence in the US banking system, the US bond arena, and the USDollar itself. To date, the authorities have succeeded in tossing a wet blanket over the gold market. See the monumental official gold bullion sales out of Europe. But they cannot break gold, which has been successfully defended at the $650 mark. In time, analyses will surface that the entire US banking system is at risk, possibly to repeat the Japanese 1990 decade outcome.
Gold over $700 by year end seems assured, but one is hard pressed to exude confidence at this point. Take comfort in its resilience. And by the way, watch gold but ride the silver vehicle, which will outperform gold by a 2:1 ratio, as usual. Central banks dump gold, but nobody dumps silver. The powers scramble to meet delivery in silver, in fact. Also the very large commercials are in deep trouble on their short silver positions, unable to cover at these lower silver prices.
If you have the time I highly recommend reading his entire post at goldseek.com. Jim Willie minces no words and definitely calls it as it should be seen.
The US Dollar is a slow motion train wreck. I lost count of the times I saw Gold mentioned today in various media as "weak in the face of Dollar strength". LOL, if today's action in the Dollar is regarded as strength, I pity the fools buying them.
If I read Jim Willie correctly, a "conjunction" of financial elements is coming together that once lined up, could unleash economic kaos across our once great nation...and probably the entire globe. A kaos we hope to profit from with our positions in Precious Metals firmly in our grasp.
Of the four charts I have today, probably the most interesting is the HUI/Gold chart. There was a major breakout in Gold Stocks today relative to gold. A downtrend line in this ratio going back to the May 2006 highs in Precious Metals was broken for the first time today. This could be huge. Gold Stocks historically have a tendency to lead the metal higher [and also lead it lower]. It is my belief that major short players in Gold Stocks are beginning to cover their shorts in earnest as they begin to see the writing on the wall: The US Dollar is toast...burnt toast.
The HUI Index as you can see above is poised for a breakout. I have lost count of the failed breakouts in this index over this past year, but the HUI looks poised today to take advantage of the coming "conjunction" of financial elements.
The rising price of Oil and the impending demise of the Dollar are probably the two most recognised Elements of Conjunction. Rising copper prices leading to a spike in the CRB index, and crashing US Treasury Bond prices are also elements of this coming conjunction. Oil is nearing possible hidden resistance at 73.75 as internal indicators RSI and MACD become overbought. The path of least resistance in Oil now is clearly up, with $67 now looking like a formidable floor in price for the balance of the year. The Dollar is teetering on the edge of the cliff as we breath daily. Today's intraday low [81.24] was one pip below the intraday low at the beginning of May [81.25].
Please click on the charts above to enlarge them and see further analysis contained within.
Gold and Silver were once again bombed and pillaged at the open of the Comex this morning. The desperation of dem Rat Bastids grows by the hour. It is becoming more obvious by the day that the ONLY time the precious Metals come under significant pressure is during the Comex hours of "paper trading" in the metals. The Asians love it, and scoop up the metal on the cheap daily now...the shorts in these metals have to have their fingers resting on the panic button...the jig is almost up as fewer hands are willing to part with their Gold to assist the shorts in covering the colossal positions.
Silver held 12.46 again today to maintain pressure on da Rat Bastids in that market. Gold bent a little today but has bounced hard off hidden support at 646. Silver needs to gain control of it's 65 week moving average before we can make plans to the upside. Gold must solidly regain the lines at 653 and 656 before we can get to excited. If Oil prices stay above $70, Silver and Gold should soon hook their engines to that locomotive and the train will leave the station.
Wednesday, July 4, 2007
Catalytic Copper?
The Fourth Of July has now come and gone. Our Independence, "questionable" at this time in our history. 60% + of our nations Debt is owned by the Japanese and the Chinese...I'd say that make us pretty dependent these days. What a sad state of affairs...
Cheer up! Gold and Silver are still available at sale prices. Both metals performed admirably on Tuesday in the face of obvious pressure by dem sleazy Rat Bastids on the Comex. "Remarkably", both Gold and Silver were tanked right off the open on Tuesday. An obvious attempt by these weasels to take advantage of the days light volume in New York ahead of the holiday. The Dollar found tepid buying at best Tuesday and the metals in no way deserved the reaction they got at the Comex open.
Silver held the line at 12.46 and Gold held the line at 653. A big round of applause for both. Gold now needs to clear 656 and challenge the shorts at 660. Silver needs to reestablish bullish control of the 65 week moving average and prepare for the Battle royal with the shorts at 12.75.
Is the two month consolidation in Copper ending? Will a breakout from resistance at 350 Monday lead to a new upleg in Copper to test May's 380 high, and could this breakout be the catalyst for a big move up in all commodities and Precious Metals? Time will tell...either it will or the continuing failure of the US Dollar will. The balance of this traditionally light trading week will prove most illuminating. The rest of the World doesn't go on vacation when we do...and it appears the rest of the World is becoming intent upon taking control of the US Dollars fate.
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