Tuesday, September 15, 2009

Like Moths To A Flame

Like moths to a flame, investors are being drawn to $1000 Gold. And too many of them may have wax wings. The thrill of $1000 Gold is careening around the Internet like a ping-pong ball in a lotto machine. The long's side of the Gold boat is getting too full. Likewise the short side of the Dollar boat is listing. Extreme caution is urged if buying Gold here or adding to positions.

Unless the Gold Bulls can muster a way to squeeze the bears here, history dictates that Gold is ripe for a smashdown over the next couple of weeks. Investors should sit tight, Gold is going higher. Traders should think seriously about taking some money off the table for the "short-term, if they have not already done so, and/or tighten up your stops. Silver traders should do the same.

Gold has support first at the broken downtrend line of the symmetrical triangle recently broken. 970 / 960/ 945. A break of 945 could devastate the Bulls here. Silver is staring at he potential of a swift and violent $2 haircut here.

The fundamentals for Gold and Silver today could not be more solid. However "technically" both are overbought. Couple this overbought signal with the CRIMEX goons massive short position in BOTH Gold and Silver and CAUTION is the word of the day.

Gold Market Update
By: Clive Maund
...in our experience Big Money almost always wins, which is hardly surprising given their extensive network of connections throughout the banking system, governments, the markets and policymaking in general – they know what’s going down and when. Even when it looks like they are going to lose, as during the banking crisis of last year and early this year, they simply push the bill for the consequences of their excesses onto everybody else. We therefore aim to align ourselves with them as much as possible. You have as much chance of winning when you oppose them as a hedgehog has of making it across a freeway south of Los Angeles. Bearing this in mind the latest COT chart is, or should be, disconcerting for bulls, for as we can see the Commercial short position exploded according to the latest data, which does not include the last 3 days of last week, so it can be presumed to have climbed to even higher levels as gold finished the week at a closing high. This means one of two things – either Big Money are going to have their heads handed to them on a plate as gold breaks out and rockets higher (historically unlikely), or the average investor in the PM sector, egged on by the plethora of bullish gold reports doing the rounds, is going to end up as roadkill before much longer, which could involve a false breakout to new highs and a concomitant explosion of Commercial short positions to an even greater extreme. The silver COT chart is even more extreme.

Fed will do anything to keep gold down
By Richard Russell, Dow Theory Letters
The one signal for rising inflation that the world understands is rising gold. The central banks do not want to see the gold signal, which tells the world that inflation is in command.

What the Fed really wants is asset inflation in housing. Housing is collateral for almost everything in the nation, and the Fed and Treasury are frantic to get housing prices heading higher.

Whatever it takes, it seems, will be utilized to hold the only constitutional money down.

When a can is placed on a stove burner, the pressure builds up inside the can. At some point, we know not exactly when, the can will explode and the pressure will be released. That, I believe, is where gold is.

You can threaten gold with forthcoming central bank sales. You can sell gold in quantity. You can smother gold with short sales. But the primary trend of gold will win out. It will be expressed today, in a month, or in 2010. The trick for us is to hold onto our position -- don't trade it, don't move in and out with it, don't hold so much of it that you get the heebie jeebies every time it dips $10.

The primary trend of gold is up. We're riding the bull. The bull will try to shake us off his back. We'll hang on.


The Coming Consequences of Banking Fraud
By J.S. Kim
It is ironic that it is the same group of people that so readily accepts the Western media’s correct analysis of China’s stock market as a huge bubble through the lens of Austrian economic principles that simultaneously rejects any similar notion as applicable to US or UK stock markets, and instead, readily embraces heavily flawed and unsound Keynesian economic principles when evaluating Western stock markets. It is ironic that the same group of people that foolishly equates being “American” with blind support of the US stock market (i.e. “being bearish on the US market is un-American!”) is also completely ignorant of both the massive fraud that is perpetrated in US stock markets as well as the tenets of the US Constitution that sound great objections and warnings to the ruinous and foolish monetary policies that are implemented by bankers as their “solution” to our current economic crisis. And finally, the greatest irony of all is that the anger that brews inside those that have been tragically hurt by this crisis can coexist with the failure to recognize that it matters not in America if the President has the last name Clinton, Bush or Obama – that monetary and fiscal agenda inside the US for the last 17 years has not wavered nor changed one iota during this period of time because it was not these men that have been in charge of the economy but the men that manufactured these men’s rise to power and that control the US Federal Reserve and the world’s Central Banks, and thus the global monetary policy.

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