Options
***SEPTEMBER 2012 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 5,393 ✭✭✭✭✭
This is a continuation of the monthly trading thread to discuss the trading of PM-related stocks, options, and futures.
The Bernake speech on Aug 31 didn't announce any QE, but it did trigger a nice boost in gold and silver. My mistake again was expecting that the next move would be triggered by a QE announcement, but I do believe that the patterns are somewhat pre-determined and that the news is mostly irrelevant. That's why sometimes good news is good, and sometimes good news is bad (and the same for bad news). So even though I believe the consolidation breakout happened a few weeks ago, today's move is a breakout of Cohodk's consolidation pattern. I think the signs are unmistakeable, the next big move is underway.
In the short term, Friday's move exhausted the short term energy, but in big moves like the one we're seeing the climb can continue regardless. So far I like the pattern. It's nice and steady and not super aggressive or volatile.
The Bernake speech on Aug 31 didn't announce any QE, but it did trigger a nice boost in gold and silver. My mistake again was expecting that the next move would be triggered by a QE announcement, but I do believe that the patterns are somewhat pre-determined and that the news is mostly irrelevant. That's why sometimes good news is good, and sometimes good news is bad (and the same for bad news). So even though I believe the consolidation breakout happened a few weeks ago, today's move is a breakout of Cohodk's consolidation pattern. I think the signs are unmistakeable, the next big move is underway.
In the short term, Friday's move exhausted the short term energy, but in big moves like the one we're seeing the climb can continue regardless. So far I like the pattern. It's nice and steady and not super aggressive or volatile.
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Comments
Knowledge is the enemy of fear
<< <i>My consolidation pattern os from 1500 to 2000. Enjoy the frustration for several more years. >>
I was referring to your most recent chart in the August thread. You're wrong about this one, this next move will last until mid next year and take us well into the $2000's.... But we'll just have to wait and see who's right. When it gets to $2000, you can post another "Gold has hit a high for quite some time" post.
<< <i>
<< <i>My consolidation pattern os from 1500 to 2000. Enjoy the frustration for several more years. >>
I was referring to your most recent chart in the August thread. You're wrong about this one, this next move will last until mid next year and take us well into the $2000's.... But we'll just have to wait and see who's right. When it gets to $2000, you can post another "Gold has hit a high for quite some time" post.
Saved for posterity.
BTW---I believe I wrote that gold will not stay in the tight range much longer. The 5% trading range that it was stuck in was unsustainable. I agree that it looks like it wants to go higher, but I vehemently disagree that it will be well north of 2000 in the next 12 months.
Another BTW---When gold was at $1900 a year ago, weren't you calling for $2500+?
Knowledge is the enemy of fear
The 18 month commodities consolidation (grains, softs, base metals, etc.) suggests the golden wave might continue partying like it's 1977 again.
Current 18-20 day gold cycle that has held since June points to another high around the 18th to 20th. That would fit nicely with SM OE week followed
immediately by end of month PM's OE. I looked back at all the Septembers from 2002-2011. A peak around that time seems to fit the normal pattern.
Buy buy buy!!!!
But really, I've written many times that I believe the next President will go down in history as the worse ever. And if gold goes to $31K in the next 4 years then surely there will be events that will prove my prognostication.
Anyone else smell the opportunity?
Knowledge is the enemy of fear
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>But really, I've written many times that I believe the next President will go down in history as the worse ever. And if gold goes to $31K in the next 4 years then surely there will be events that will prove my prognostication.
Anyone else smell the opportunity? >>
I don't think it matters who the next president is, we are beyond the point of no return. I'm not sure that means the next president is the worst ever, although I think the current pres is in contention for that title so another 4 years will only ensure he gets it. It's a no-win situation IMO, regardless of who wins.
The pattern looks great. $1715 might provide a little short term resistance, but the big move is clearly underway. The switch has been flipped, and it appears it's on. Doesn't matter who gets elected, or when or what the next QE event is. Given the jump in the SP500 today it would appear at least initially that some liquidity has been unleashed. Stocks are also set to rally into the election.
<< <i>I took the summer off from trading as usual. Did I miss anything?
MJ >>
Yep, buying USLV at 21.00 in late June.
Keep an open mind, or get financially repressed -Zoltan Pozsar
<< <i>
<< <i>I took the summer off from trading as usual. Did I miss anything?
MJ >>
Yep, buying USLV at 21.00 in late June. >>
Missed a ton of cheap mining stocks that bottomed between May-July and are now up 30-50%, most seniors included. A number of doubles in there as well.
Even plain vanilla GDX and GDXJ are up +30%. Nugt nearly a double.
derryb, you must have ice water in your veins. If I had been holding USLV I'd have probably dumped it at 30, very likely at 35, and almost certainly today.
As it was they got me out of my NUGT way too early. During the usual end of August smackdown I got into some quality juniors as well as some that haven't
participated as much as the other high flyers. A lot of those flew today though.
Keep an open mind, or get financially repressed -Zoltan Pozsar
It was a good summer for buy and holds made pre Memorial Day. Those look even better today including Apple............MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
That makes you evil.
Have a great weekend.
Im going to check out Mt. Shasta, before the end of days causes it to blow up. Only a few months left.
Knowledge is the enemy of fear
<< <i>I also tend to trade from the short side.
That makes you evil.
Have a great weekend.
Im going to check out Mt. Shasta, before the end of days causes it to blow up. Only a few months left.
You better hurry. Head for the hills. I experienced my first earthquake on US soil last night in West Hollywood. Special. It kind of sucked.
Enjoy your weekend and your last few days on earth.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I felt my first quake about 25 years ago in, of all places, Syracuse NY.
Knowledge is the enemy of fear
Hence rendering the end of the great inflation bubble and the beginning of the greatest asset deflation human kind has ever witnessed.
Knowledge is the enemy of fear
<< <i>This "old timer" believes in gold and gold backing as well...maybe there's something to it after all
Not clear on how raising the price of gold devalues the dollar except when it is used to purchase gold. Seems like the only way the authorities could raise the price of gold to $10,000 is to become unlimited buyers at $10,000. What you spend dollars on and how much you spend has nothing to do with their overall value unless paying more is applied across the board. Seems you would have to raise prices on everything else to the tune of the same 576% to achieve the devaluation the author is calling for. What am I missing here?
Keep an open mind, or get financially repressed -Zoltan Pozsar
<< <i>This will render the dollar the most wanted currency in the world
Hence rendering the end of the great inflation bubble and the beginning of the greatest asset deflation human kind has ever witnessed. >>
Ok. But to get there requires first inflating the bubble to even greater heights before bursting it. The most wanted currency in the world at the
time of the bust will be the one with the strongest economy and most gold. It may not necessarily be the US.
When FDR raised the pog in 1933 by 69% that effectively devalued the US dollar against other world currencies. But it's true that within 1933 America
the dollar still purchased the same amount as it previously did. With the world's economies and currencies so inter-connected today it would seem to me
that the USD purchasing power couldn't help but become internally reduced if that same gold repricing were applied today. Assigning it any price essentially
suggests gold backing. Anyone noticing the price of gold reassessed to $10,000/oz would seriously consider repricing their goods accordingly. It would make
sense that other commodities would soon follow and a flight from dollars to tangibles would accelerate rapidly. The govt would have had to increase the supply
of dollars to help make this flight possible. I know I wouldn't want to sell you my 1 ounce of platinum at $1600 for 16 $100 bills nor for 0.16 oz of repriced gold.
Rather, I'd jack the price of it up to 0.9 oz of gold or 90 $100 bills. In order to raise the price of gold to $10,000 the govt would have to take it from mere PM to official
backer of the currency. They could also just print up all those $100 bills and let market forces raise it to $10,000....then institute a fractional gold backing.
<< <i>...The govt would have had to increase the supply of dollars to help make this flight possible. I know I wouldn't want to sell you my 1 ounce of platinum at $1600 for 16 $100 bills nor for 0.16 oz of repriced gold. Rather, I'd jack the price of it up to 0.9 oz of gold or 90 $100 bills. In order to raise the price of gold to $10,000 the govt would have to take it from mere PM to official
backer of the currency. They could also just print up all those $100 bills and let market forces raise it to $10,000....then institute a fractional gold backing. >>
It wouldn't be necessary for the govt to increase the supply of dollars to make that possible. In such a scenario dollars would be hot potatos. You would do everything possible to avoid receiving and holding them, and dollars would come flowing out of matresses, safes, and all forms of bank accounts. They do not have to become physical dollars and can remain electronic. And the only way you'd part with your gold, platinum, or other goods is if you actually needed the dollars for something or if you got a premium your goods. That is, unless a government agency was a ready and willing supplier of all the gold you could want at $10k. The govt would likely make it illegal to hold gold, so the public would be looking for any and all tangible alternatives.
can go infinite. Keeping printed dollars in short supply keeps the people on the short leash of govt control.
I agree that if gold ownership is stifled either directly or through oppressive taxation, then those digi-dollars will be directed at the next most valuable tangible asset. It could ramp
up from gold to silver to platinum to palladium, to oil, to land, to art, to base metals, to food to clothing, etc. The govt eventually will have to outlaw private ownership of everything
tangible to keep a lid on it. And it will eventually blow up somewhere along the string. Can't own gold...stockpile silver. Can't own silver, stockpile the PGM metals. Stockpile
copper if you have to. People will stockpile whatever it takes to find an alternative to rapidly depreciating fiat money. Store shelves will empty within days on credit card purchases.
Who cares if you can't pay it back....worry about that later. Govts can't outlaw everything and still retain power....at least not for long.
<< <i>Electronic dollars count as much as FRN's. We know the govt is probably not going to print a lot of FRN's so as to keep them very scarce and rarer than gold. Electronic dollars
can go infinite. Keeping printed dollars in short supply keeps the people on the short leash of govt control. >>
Guess I still don't understand your argument about printed dollars. I can use Paypal or even pay your directly out of my Wells Fargo bank account with digital dollars. A scarcity of paper FRNs won't slow me down or keep me on a "short leash."
<< <i>] Guess I still don't understand your argument about printed dollars. I can use Paypal or even pay your directly out of my Wells Fargo bank account with digital dollars. A scarcity of paper FRNs won't slow me down or keep me on a "short leash." >>
What happens when the power gets cut to ATM's, bank accounts, and credit cards? This could happen a number of ways.
What would happen during a 1-3 week banking holiday while the system is being resurrected or overhauled? Trade personal IOU's?
Those FRN's would come in very handy assuming they remain acceptable to everyone. And there aren't enough of them to go around.
<< <i>
<< <i>] Guess I still don't understand your argument about printed dollars. I can use Paypal or even pay your directly out of my Wells Fargo bank account with digital dollars. A scarcity of paper FRNs won't slow me down or keep me on a "short leash." >>
What happens when the power gets cut to ATM's, bank accounts, and credit cards? This could happen a number of ways.
What would happen during a 1-3 week banking holiday while the system is being resurrected or overhauled? Trade personal IOU's?
Those FRN's would come in very handy assuming they remain acceptable to everyone. And there aren't enough of them to go around. >>
So to clarify your statement, the "short leash" due to shortage of paper FRNs is only effective with a shutdown of digital dollars as well.
BTW, personal IOUs are essentially checks, so yes we'd probably still trade those, but with appropriate risk premiums and from trusted sources.
I don't know how quick it could all happen, but I also have faith that the one thing the government can do well is print large quantities of new bills (and in higher denominations) quickly.
what they can put out per day. I concluded that there just wasn't enough time. Assuming there's $500 BILL in frn's circulating in the US (the majority are overseas)
it would take some time to add another $500 BILL in the short term. Printing 5 BILLION $100 notes doesn't sound seem like it could happen within a few days or weeks time.
There's also limited paper suppliers (ie Crane) that might not be able to gear up in time to support a short term change. With $450 BILL in gold supposedly owned by the
US govt/FED, that's about on par with the frn's circulating in the US. Physical dollars are indeed a scarce item where the average household probably doesn't have more than
$200-$500 at a time.
If you are conspiratorial and if there has been planning for such an event, they may even have stockpiles of cash hidden away. I'm not suggesting any of this is true or going to happen, just that there are some pretty easy solutions.
Edited to add: The government will ensure an adequate dollar supply. It's too hard to tax barter...
by quintupling the size of the largest note in circulation would be like pouring fuel on the fire. It would be a last result after the war is already deemed lost. There are
stockpiles in cash put away, in particular it's those newly designed $100 bills that are not being released for whatever reason. So far the reason has been stated as QA
or something like that. But it might be a lot more involved as to what crisis or event they are being reserved. It would take some time to develop a barter economy, esp.
outside the cities for professional workers. How would I pay my dentist for the next dental cleaning bill if I don't have FRN's? PM's? Canned foods? IOU to cut his lawn
for 1-2 months? It's not like I have any professional services I can offer him in return other than manual labor. .
Preparing For the Fall
A superb article by Bob Hoye on 500 years on deflating financial bubbles and gold's role. What I found most interesting are some of the historical "facts" he uses from centuries ago that
I haven't seen printed before. He's made it pretty clear there is nothing new under the sun....just different twists to get the same results. From base metals to gold miners,
he doesn't leave much out. I found it to be one of the better summary articles on booms, busts, credit, and PMs in quite some time.
In the short term Hoye points to the SGR (opp of GSR) daily RSI of 85 getting into very frothy territory. You'd have to go back to the April 2011 mania to find anything higher.
Back then it peaked at 92. I found the action in junior miners today not very good with a bunch of new morning highs turning into doji-like candles by end of day. The seniors
pretty much all pulled back to start filling Friday's gap up. TBond auction set begins tomorrow which never seems to help the PM sector. And by next week we're into back to
back OE weeks with a final end of month TNote auction set. A very good set up for a 1-2 week pullback. Gold could still pull off another leg upward, but I don't think the miners
can go much higher from here. Base metal miners picked up the slack however....but for how long?
So far gold is looking good and has merely done a 38.2% retracement of the last move up. Downside from here should be limited and gold should be ready to rock some more soon. Mclellan's next important date is a top due Sep 24.
BTW, on my trip to Jackson Hole I made it through most of the state of Wyoming. That state is doing well. Not much sign of recession/depression there.
the ravages of 40% per year Argentinian peso printing. Seems the people were stocking up on gold. Can't have that. If you have excess gold it has to be sold primarily through approved Swiss, US, and Argentinian financial entitities. Guess this means the people will have to find some other competing tangible assets. In Argentina's black market the US dollar brings a 150% premium to the official exchange rate. It would appear gold will head in that direction.
Translated text
I knew it would happen.
And I presume you think thats bad? Why?
Knowledge is the enemy of fear
<< <i>The push towards electronic currency continues.
And I presume you think thats bad? Why? >>
Cash is untrackable. Some prefer the extra level of privacy that cash provides.
<< <i>
<< <i>The push towards electronic currency continues.
And I presume you think thats bad? Why? >>
Cash is untrackable. Some prefer the extra level of privacy that cash provides. >>
I agree with that. However, I dont see any harm to the overall economy if everything was electronic. Some might see many benefits.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
I just spoke with my credit card issuer and there was an identity theft attempt on my card, so it is being re-issued for the 3rd time in recent memory. They didn't quite have enough of my personal info to get a new card sent out to a different address.
That's just Reason #1.
Reason #2 is that there is no accountability in the banking system or with money and debt creation. That's the biggie.
Reason #3 is that it's just an easy way to get young people and poor people hooked on debt. I know, I know - that arguements' been around for decades. Nevermind that it's true.
I presume that you think a push towards electronic currency is good? Why?
I knew it would happen.
I knew it would happen.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Maybe the cash underground will grow greater, and the advent of true PM exchanges for non PM goods will out of necessity be developed on a non official level.
<< <i>So, if we are talking about gold bullion like J&M's or such I could see where the gov could put a bite on it and tax it to death but what about pre '33 numismatics? That opens a whole can of worms for the gov, if they can confiscate collections or "Hobbies" then would they do it for stamps...could they? If they put the screws on gold transactions, seems like this could make pre '33 numismatics go throught the roof! >>
Look north to Canada. I believe they now have a 10% value added tax (VAT) on all numismatic coins that get bought and sold, and a 50% capital gains tax on any profits from bullion. Down the line, might be an intangibles tax, where bullion and numismatic coin owners have to register their stuff and pay a percentage every year, or risk government confiscation.
As for qualifying for credit cards, in California, many benefits are distributed via debit card. The state issues the cards out and the credits. Many with the state issued card don't have a bank account, or another credit card.
Oh yeah,
Reason #4 - fees and taxes on every transaction when you spend your OWN money.
I knew it would happen.
<< <i>As for qualifying for credit cards, in California, many benefits are distributed via debit card. The state issues the cards out and the credits. Many with the state issued card don't have a bank account, or another credit card.
>>
Aside from gov. handout debit cards, to conduct any financial transactions in a cashless economy, bank accounts will be required to process all other receipts and payments. Might even see a First National Bank for the Homeless and Transient. The unfortunate veteran on the corner with the cardboard sign will need to be able to process electronic donations. >>
Keep an open mind, or get financially repressed -Zoltan Pozsar
<< <i>So, if we are talking about gold bullion like J&M's or such I could see where the gov could put a bite on it and tax it to death but what about pre '33 numismatics? That opens a whole can of worms for the gov, if they can confiscate collections or "Hobbies" then would they do it for stamps...could they? If they put the screws on gold transactions, seems like this could make pre '33 numismatics go throught the roof! >>
It could. But there are 2 precedents out there already that could hinder this. The 1934 Gold Reserve Act exempted gold coins that were "rare and unsual." That terminology
was never really looked at closely by both the populace and the SS/FBI who were doing the confiscation. A modern interpretation of that could subject nearly every $20 Lib/Saint
to non-collector status. Patriot Act 2 has already determined that any gold coin where 50% or more of its value is due to the metal, is basically bullion. That means the majority
of MS66 Saints (and everything lower) is currently bullionesque. If you want to improve your odds of keeping your bullionesque gold coins, try to complete a set rather than a pile
of duplicate common dates. In any event, a massive tax would do about the same thing. We already have 28% on collectibles/bullion. One could expect bullion to be placed in the
50% category down the road.
<< <i>Your chart seems to indicate that they will need more liquidity or bond prices will drop precipitously. Can't have THAT!!!! <Ctrl P> <Ctrl P> <Ctrl P> >>
Rates could go to 2.5%--where they were 2 months ago. Or 3.5%--where they were 6 months. Again, I dont see much harm in either scenerio. More of the same old same old. PMs stuck in the mud.
Regarding electronic money. I think it is just as good as anything else. Has plus and minuses just like fiat or gold.
Knowledge is the enemy of fear
For those that think it is all that far off, really tough economic times (eg: mass starvation) almost always means radical social changes. There are already proposals to track every motor vehicle 24/7 so as to tax mileage instead of gasoline consumption. The U.S. government recently made a list of cell phones that no longer work, on the premise that these are stolen phones. In other countries, public cameras are on every street corner in the major cities. In the U.S. it has been reported that people that visit certain websites will have their computer activity and smart phone activity constantly monitored, within hours of that person visiting certain websites.
I see it as a near certainty that will be totalitarian abuse of power with all electronic money. Privacy will be a thing of the past, and impossible to get back. For the ruling class, control or the illusion of control will be greater than ever. Just hope that you or your friends or relatives don't end up on the enemies list and have their chip called in for repair, or if they upset Big Brother enough, the chip gets turned off and that person can no longer buy or sell, or hold a job. If there is an open revolt, it might be worse than that.
<< <i>Aside from gov. handout debit cards, to conduct any financial transactions in a cashless economy, bank accounts will be required to process all other receipts and payments. Might even see a First National Bank for the Homeless and Transient. The unfortunate veteran on the corner with the cardboard sign will need to be able to process electronic donations. >>
Well, according to the democrats, it's an unspeakable burden to even require people to obtain and show an ID to vote. How could these people possibly be expected/required to have access to a computer and/or a bank account to get their benefits and make common transactions? Sounds like discrimination to me.
<< <i>For those that think it is all that far off, really tough economic times (eg: mass starvation) almost always means radical social changes. There are already proposals to track every motor vehicle 24/7 so as to tax mileage instead of gasoline consumption. >>
The goal is not the taxation but the tracking. The taxation is a cover for the true intent. The gasoline tax already effectively taxes mileage while encouraging fuel efficiency and fuel efficient vehicles. I don't believe for a minute that the intent is to get a few more bucks out of Prius drivers.
Stocks are poised to rocket higher on tomorrow's announcement.
We give them one. We will give them a computer with an ISP, just like we give them a "free" phone with air time. It's easy, we get an internet tax just like the Universal Service Charge on your phone bill but it might be called a Universal ISP charge...just a few buks for you next new Internet Access Charge that is automatically deducted from your Internet Service Account. No problem...