The Return of Nostradumbass

Just a big picture item to keep your eye on these next few days.

Much has been made of the selloff in the Nikkei...and deservedly so! After years of moribund performance, Prime Minister Abe decided to blow out the Yen by effectively devaluing it by half over the next few years. The result of all this haphazard money creation was an almost immediate flight into Japanese stocks. The Nikkei 225 index nearly doubled in a run from 8,500 to 16,000 between November and May.

But a funny thing happened on the way to blissful prosperity..the market broke. And it broke hard! Falling nearly 20%, from 16,000 to 12,500 in a matter of days. The selloff in Japanese equities boosted the yen and the yen-$ "rallied" from near 97 to 106. All of this yen strength has contributed to a drop in the POSX from near 84 to this morning's level below 81.

"OK, so what's the deal, Turd? Why does this matter?"

Because it seems quite clear that a sharp, short-covering spike/rally is coming for the Nikkei. Take a look at the two charts below. Note the clear double-bottom at 12,500. That's the first thing that should grab your attention. Then look at the daily chart. Since when does something go straight UP and then come straight back down? There's almost always a bounce which leads to a failing double top. And this is what I think is coming. (Btw...if you're crazy enough to attempt to trade something like this, you can start here: http://etfdb.com/index/nikkei-225-index/)

Adding some confidence to this idea is that fact that Tungstenman Sachs has decided NOT to close out their "long Nikkei" recommendation, even though their stops have been hit. Hmmm. What do you think they are planning to make happen expecting to happen next? http://www.zerohedge.com/news/2013-06-13/despite-being-stop-lossed-its-long-nikkei-reco-goldman-refuses-close-out

And the ability of The Pig to magically reverse at critical support levels is well-documented. Here we are again. The 81 level in The POSX has consistently identified as important support or resistance, depending upon which way the index is trending. And where are we this morning? I've got 80.76 last. So, here's another piece of the puzzle. A snapback rally in the Nikkei will likely lead to Yen weakness and a move back toward 100. Since the Yen is a prominent component of the POSX, a falling Yen will help to bounce The POSX back UP and above the critical 81 level, maybe all the way to 83, at which point The Pig will begin tracing out "right shoulder" of a massive head-and-shoulder top.

IF all of this comes to pass, the short-term effect on paper metal is predictable. Lately it seems that any Pig selloff is greeted with yawns while any upticks have been used as reason to sell sell sell. Let's see if that happens again even though physical demand continues to support price and $1350 has been rock-solid support.

Maybe another trade possibility is to sell crude? A rising dollar will likely generate some crude weakness and you can clearly see that every time crude touches the red trendline on this chart, price quickly reverses.

So, anyway, just a cautionary tale today. Nothing has changed my bullish outlook on metal prices in the near term. All of the stuff mentioned earlier this week regarding the CoT and the BPR is still valid and extremely important longer term. In the short-term, however, there may be a fiat-making opportunity for those so inclined. Good luck!

TF

194 Comments

wouldyoubelieve...'s picture

1st?

?

sdstacker's picture

First!!!

First time ever! cool

EDIT - nope, I guess not crying

QE to infinity's picture

3rd?

3rd! cheeky

Himalaya's picture

I want silver 18 very fast

Just for a day!!!!

Turd Ferguson's picture

And this is helpful

MODERATOR
treefrog's picture

fufth

5th!

beastly hot here at treefrog manor.  taking a break from yardwork/gardening.  c'mon, silver, hit a bottom and reverse!

Howard Roark's picture

Louisiana chem plant blast

Turd Ferguson's picture

And this is interesting...

MODERATOR
Strongsidejedi's picture

randomize your IP's people

hello TF fans,
This is the strongsidejedi checking in after a lengthy period of silence.

I've been reviewing the stories from DC on N$A's behavior.

Nice huh?

They've been tracking your IP address all along.

Actually, what's interesting is that we've been saying this for years on this board.

Anyways, for any of you just posting on this board, you may want to use an IP randomizer.

TF, you may want to host your site outside the US in a neutral country and then let people subscribe for IP randomizer software.

It's ridiculous that we need to take these measures as ordinary citizens, but the IP randomizer is very helpful.

You really can see which companies are invading your privacy.

Their websites throw a hissy-fit when we hit their server from a randomized IP source.

Facebook was the worst offender.  They actually put a series of log-in confirmation screens and then asked to confirm my location.  Screw you Suckerman... you have no business tracking my location and neither does your company!

philly's picture

Another top ten to add to my

Another top ten to add to my stack! Isn't nearly as fulfilling as adding ASEs, but when you can't presently afford the one, you have to settle for the other!!

Just A Regular Guy's picture

@Turd

1000 Hat Tips! Great work!

Wizard's picture

I think this is Very Cool

Top five silver commentators

Posted Jun 12 2013

Excerpts:

Steve St. Angelo

Mr St Angelo was introduced to us by both the Twitter and G+ community and he goes by the names SRSrocco. One of his latest articles was featured in our Best of the Web section recently.

An independent researcher, SRSrocco researches ‘areas of the gold and silver market that, curiously the majority of the precious metal analyst community have left unexplored.’ His writing is gutsy and to the point. He often uses graphs to outline the distortions in the precious metal markets compared to other assets which makes understanding the fundamentals very accessible.

Like many on our list SRSrocco writes about both metals as well as the economy. He discusses silver as an investment more than as a monetary asset. For some this may be a barrier, however in terms of attracting more investors to silver this is perhaps no bad thing. His belief that gold and silver ‘are stores of trade-able energy value’ may seem a little kooky or difficult to get your head around, but nonetheless his commentary is interesting, valuable and adds a huge amount to the silver debate.

Ed Steer and Turd Ferguson

A funny one to put together, especially as they have nothing to do with one another but I’ve included them as they both work hard to bring some of the best daily commentary from both themselves and from around the web.

Mr Steer, with his Ed Steer Gold and Silver Daily Newsletter works to make sure you know what went on in the previous day’s trading. With a host of great links to ‘Critical Reads’ at the bottom of the newsletter (sometimes yours truly is featured in there as well), Mr Steer’s summary of the day’s trading, mentions of ‘da boyz’ and hat tips to other precious metals commentators make him the go-to person when it comes to staying on top of the silver markets.

Mr Ferguson runs TF Metals Report, an online blog and community which charts ‘the end of the Great Keynesian Experiment.’

Turd blogs on a daily basis, often with hand annotated charts to explain what’s been going on. He also runs a podcast which has some great guests such as Jim Willie and David Morgan (mentioned previously).

Whilst Mr Ferguson himself does some great posts it is his online community and ‘hat tipping’ that means some of the best commentary and analysis on silver is brought to your attention.

http://therealasset.co.uk/top-five-silver-commentators/

billwilson's picture

Too easy

The folks playing with the gold price and miners have it far far far too easy. With sentiment so negative  manipulation is a piece of cake. 

- cap all spikes that you actually want ... cause then you can short from higher.

- savagely sell any spikes that are unwanted (might break a down trend) and make sure no one tries that again

- for every tick higher in the broader market, sell the miners

- for every down draft in the broader market ... sell the miners.

Without concentrated large scale buying (and even the open interest in gold is horribly low) the bad guys can not be flipped. And right now there is barely any large scale buying of miners or paper gold, let alone concentrated buying. That means we have a while to go yet ... until they can not push down any lower. I had thought the recent XAU low may have been it with the declining 50 day ma providing a possible break point (as it continues to drop the next 5 - 10 days). Now not so sure. It will not take much to push us one more leg lower as crazy as that seems valuation wise. The only near term concentrated buying possibility is short covering ... but given the aggressiveness of the attacks on any rally attempt the shorts are not nearly ready to flip yet. Looks like we go sub 100 on the XAU, and may have to wait for the traditional August rally.

Mickey's picture

I have resorted to

trading covered calls on my positions. This stuff is so volatile you can day trade and snarf some profits and be happy with that. Worse comes to worse, if the underlying PM position advances you buy back the call at a loss but you made up for it on the underlying advance and earned some premium.

But I want to keep my positions for 2 reasons. First I expect a fast rebound when it happens and second, I would like to keep and get long term tax status on underlying miners.

So covered calls seem to be the best way to handle that.

with this mornings selloff-I bought back the calls and now waiting for a recovery to resell them.

in the meantime selling the calls has tremendously reduced the losses on the miners.

What I do not have is the guts to sell puts. premiums are not bad, however a flash crash in the general market might take down miners too.  And when the hedgies run to the other side of the ship--look out.

everyone should be doing some hedging regardless, unless we are in the early 2011 mode we say in silver where day after day silver it seemed  was going up 1-2-3 bucks. Then you get into AGQ and UGL and you can even sell covered calls on that stuff too.

waxybilldupp's picture

@Wizard ...nice find ...

Saw this was the last post on the dead thread.  Really glad you brought it over.  Validation of what most of us (MagicCerealLapper and a few others maybe not so much) have known for a long time.  SRS is a treasure and Turd has reinvented metals reporting.  Turdville is becoming legendary.  Kudos Mr. Mayor!

Eyes open; no fear ... wax off

indosil's picture

Zero Hedge Gold

ag1969's picture

Remember the Old Days with Provident...

...When you would order some shiny and receive it a few days later, and then a couple days after that they would notify you it shipped?  Well I just received a package of shiny from the bearing company that I have received no shipping notification on and it still says processing in my account.  I just ordered it on 6/7 and it is already  at the bottom of the ocean.  That is the bearing company I fell in love with many moons ago.

I know some will say, "See, there is no shortage."  I say I could care less.  I hated waiting weeks for my shiny when the "shortage" was on.

Someday honest money will win the day again as it has for thousands of years.  Until then, I like it in my hands immediately if not sooner.  Real money or fake money, what's in your wallet?

Received two ten ounce OPM bars.  Rather ordinary 10 oz bars, stack em high!

Also got a 5 oz Fiji Taku.  I like the Fiji Takus, the hawksbill turtle is cool, but it does not look nearly as impressive in the 5 oz coin as it does on the 1 oz, but still a good coin and another thing I like is they got rid of the scum queen on the obverse and have a cooler design.  I am also awaiting a tube of 1/2 oz Takus.

The 5 oz Libtard and the 5 oz ATB's are far nicer IMHO, if you are into 5 oz coins, which I am.

There are now two 2013 5 oz ATB designs released.  I have already received the White Mountains NH coin which I find to be one of my favorites (I have them all) but not sure if I am just biased because I live in NH and have been playing in the White Mountains most of my life.  I am awaiting the Perry's Victory coin which I should get next week.

Cry Me A River's picture

NIKKEI FUTURES UP ABOUT 400 RIGHT NOW

There Is An Open Outcry Session (Nikkei 225 Dollar Futures Open M-F 8-3:15 CST)

NIKKEI OPEN OUTCRY TRADING HOURS:  http://www.cmegroup.com/trading/equity-index/international-index/nikkei-225-dollar_contract_specifications.html

Nikkei 225 futures currently trading at 12856 -177 but up from previous session in Japan  http://www.sgxniftydowfutureslive.com/index_files/DOWFUTURES.htm

It Looks Like Nikkei Index Closed About 400 Points Lower In Their Last Session: Thus, Current Futures Are Up.

12,445.38     -843.94 ( - 6.35%)

rtabit's picture

POSX

Looks like good area to expect possible bounce in DX (POSX) in both daily and weekly charts.

Daily: Hitting potential support on the lower parallel in both blue and red fork.  Blue fork gets more DX bullish the higher the close is on the current bar, is this a breach or flush of lower parallel, we'll see but currently looking like it going to be a flush to me (bullish DX if flush).

Weekly: Hitting lower parallel of this fork also

Mickey's picture

on covered calls:

caution-you are still playing against the house--the auto trade programs everywhere--so when selling I throw out an offer above the bid and patiently wait--and on the buy back I do the same-offer toward low side and see what happens. It might be big money for the  big boys but for me the extra nickel or dime pays a lot of trading costs.

onc ein a while I change the price and no sooner than I do that the others immediately come up or down to meet me.

dgstage's picture

Metal Orders

Texas Precious Metals shipped in one day for me this week. Tulving told me one to two weeks, which most likely means longer. They were cheaper but I rather have in my hands.

SilverSurfers's picture

pento

passing gas,

Mid-week Reality Checkmp3)

 

I hope you enjoy this edition of the Mid-week Reality Check.

Please remember if you are not already an investor with Pento Portfolio Strategies, you can email me directly using mpento@pentoport.com or call (732) 772-9500 to get information about our portfolio services. You can also go to Amazon.com and order my new book titled, "The Coming Bond Market Collapse". 
 

Respectfully,

 

Michael Pento

President: Pento Portfolio Strategies

www.pentoport.com 

mpento@pentoport.com 

O (732) 772-9500 

M (732) 213-1295

As part of complaint filing, chief, en banc, SMD, MPI, discovery requests all go all as part of a big bang upon JPM, with sets of interrogatories, requests for admissions, and for requests for production, for confirmation by target JPM, thus in moving papers or stated in declaration. For eample, how many contracts did you or your doe corporations sell durng the 4/12 price drop during D hours +/- x hours. Produce for inspection all sells orders between D hour and Y hours before to roe doe corporations, and or roe corporation (GS). What was the average contracts sold (D hour +/- x hours) +/- y hours, during the dump on or about April 12th 2013. What was the price before D hour - y hours. What was the price hafter D Hours + y hours.

---

market dump, man does this stink!!!

Im a believer.

tyberious's picture

My Dear Extended Family,

My Dear Extended Family,  

 

Dear Adam,

 

For what it is worth probabilities support that gold already bottomed and as time passes the chance of a new low becomes less probable. Gold must form a technical bottom formation now because of the straight line down that the Fed created.

 

A V bottom is no longer probable.

 

Just like the dollar at .8400 on the USDX was bad for the Fed's desire to see a business recovery, gold yelling deflation is also negative for the Fed's best interests.

 

I think gold has bottomed and now is forming a technical bottom which could take a little time. This time out I think selected and the gold best shares with low costs and controlled overhead that are producing will outpace gold in percentage appreciation terms. 

 

Respectfully,
Jim

 

Is Gold at a Turning Point?
Precious metals investors' heartbreak may soon be over  

by Adam Taggart
Wednesday, June 12, 2013, 6:18 PM

 

There's no way to sugarcoat the dismal performance of the precious metals in recent months. But a revisitation of the reasons for owning them reveals no cracks in the underlying thesis for doing so.

 

In fact, there are a number of new compelling developments arguing that the long heartbreak for gold and silver holders will soon be over.

 

A Hard Look in the Mirror

 

The past two years have not been kind to holders of the precious metals. The price of gold is down over $500/oz since the record high (nominal) price it hit in August of 2011. That's a decline of 28%. Silver has seen a decline of 56% over the same period.

 

clip_image001_thumb14.jpg  

 

A healthy amount of that decline came in the past seven months, which have pretty much seen a steady price deflation punctuated by sharp (and historic) downdrafts:

 

clip_image002_thumb15.jpg  

 

On top of these grim charts, daily headlines touting, often with delight, the demise of gold appear nearly everywhere in the media.

 

 

More...

tyberious's picture

Mad

Ummm, I sorta got that! LOL

dumpster's picture

puts calls on precious

puts calls on precious metals

like trying to cross the stream on the back of an alligator thinking it to be a log

so trading for nickels and keeping smacked dab in the system is foolish.  sometimes the fecklessness of the day trader is beyond anything.

so what happens as you do puts and calls and the dough is tied up in a bail in. 

are you so out of sorts that a few silver and golds are out of your paygrade... so is trying to game a system that is gamed before you trade .  front running yadda

best to just do laundry for others and keep some dough. wash rense repeat

Hunt brother's picture

May 20, sp500 peaks at 1685....

Cry Me A River's picture

FROM NUMISMASTER:

Big Brother Knows You Have Gold?

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=26933

ArtAvatar26933.jpg By Patrick A. Heller
June 11, 2013

With the huge news last week about the National Security Agency (NSA) obtaining metadata about telephone calls placed by millions of Verizon customers, the specter looms that such surveillance could be used to track people who are purchasing and selling precious metals.

Just think for a minute. While the NSA does not have actual recordings or transcripts of such phone calls, it has the ability to do a search for phone numbers called, or were called by coin and bullion dealers. Even though a sizeable percentage would not involve bullion-priced gold and silver transactions, many such calls are made for conducting such trades. If the U.S. government wanted to make up a list of people who might own precious metals, the NSA surveillance would make the task much easier.

If the NSA has been able to track telephone numbers on calls that are made, I don’t see why it would not also be able to get the same information about which email addresses are sending or receiving messages from coin dealers. Checking the content of such emails would likely be much easier than trying to review recordings of phone calls. So, just because you don’t use a telephone, you can no longer assume that your email communications with coin and bullion dealers are private.

You won’t be off the hook if you use a different phone or email address to contact a dealer.

After all, the NSA is checking connections made to other telephone numbers (and potentially even their connections with others) by whoever had a call with a telephone number under investigation.

The governments of the world are also drawing tighter restrictions about trading gold and silver, even though none of them are currently outlawing their ownership. For instance, on May 23 France enacted a law that prohibits the post office from handling shipments of any coins, currency, or precious metals. While it did not prohibit private couriers from handling such products, earlier this year both Federal Express and the United Parcel Service prohibited shipments of coins, currency, or precious metals to or from a French address.

Fedex has even gone further, where it will not handle such packages for shipments to or from the United Kingdom or Switzerland. Don’t be surprised to see similar restrictions pop up elsewhere. Australia already has a prohibition against coins and precious metals being shipped into that nation by all means.

As I understand it, both Australia and Canada have requirements that customer purchases of precious metals be reported to the respective governments. While this is not “confiscation” of gold or silver, it would certainly intimidate many would-be purchasers who wish to keep their ownership private. Don’t be surprised if such reporting regulations spread to other nations.

Especially in the United States, I don’t expect to see another program of fully compensated mandatory gold redemption such as occurred in 1933. The nations of the world are trying to pretend that precious metals are not money. Should the U.S. or any other nation try to call in gold or silver, that would be an admission that they have been lying to the citizenry all these years. Such an attempt, I expect, would hasten the collapse of that country’s fiat currency.

The only circumstances where I could foresee another call in of gold or silver would be if the national currencies are so near to total collapse that any desperate move might be considered.

If you are contemplating owning some physical gold or silver, but have not yet done so, one more reason to consider making your purchase soon is to have the maximum possible privacy compared to what will likely be less anonymity in the future. While it doesn’t make sense from a consumer benefit standpoint, you might want to consider making your purchases from a dealer that you have never called, emailed, or even visited their website.

Mickey's picture

dumpster

I think I have sufficient physical since have been buying since 2004.

My option trades are covered calls on miners but perhaps you did not see that.

I think when miners do run up the move will be proportionate to the 2008-11 run up--ie 400%

I guess it depends on how high gold and silver go--gold went from 700 to 1900--so I believe miners have some catching up to do to begin with. If gold triples to the 4000 areas- I think miners at least go up 6 times with a lot of that once gold passes 2000.

aem is 30.45 now--a july 32.5 call is 88 cents--so thats about 2.7% and you can do that maybe 6 times a year-say only 5 times 13.5% not too bad for cash flow. And yes--you can sell puts too if you want but you better want  and be able to buy more stock.

by the way-purely buying call options when we have a market like early 2011 works well too.  Its a gift now to the option sellers.

Mickey's picture

data spying

do not forget, they have credit card data--they can sort on bullion companies--or, they can access your bank records for checks. Thats why some folks I know buy with cash from different dealers with 6-7k at a time.

If you buy with fiat, I guess the newest drones will see you walking into the bullion store and walking out with a bag or box--and then transfer the data to the IRS. or maybe the NSA new facility in Utah (why did they have to build a new facility when the govt has so much in the way of empty buildings already).

seriously, in a few years they will certainly be able to see if our cars need to be washed or if you ding the car next to you in a parking lot. or how much you water your lawn when they have conservation programs going on. Auto accidents will be adjudicated by review of the eye in the sky. I don't dare open the car up in montana or new mexico or AZ (where 75 sometimes is a suggested speed and for example coming down south from flaggstaf  if you are not doing 90 the other drivers want to knock you off  the road).

I have a new hvac system thats tied to internet so I can change temps from away. They will be able to tell my living preferences as a result of that. Our cable TV etc-

Its endless and mindboggling. All you can hope for is you slip thru the cracks.

I used to laugh at the "kooks" who wanted to get off the grid.

(did I say anything here I might regret?)

SilverSurfers's picture

Question

How the heck can you have price discovery, in a market,

where non-producing people are selling chit they dont even have?

What am I missing??? &^$@%$^%$%#^$%^%$%#*^& Stated another way.

There can be no legitimate bullion price discovery, in a bullion physical market or in bullion futures markets, where non-producing participants are selling bullion they dont even have and will never actually produce, as in a bullion mine having the real physical stuff in the ground in deep storage.

Naked short bullion sales by non-miners is simply fraud.

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