Pailin's Trading Corner

http://seekingalpha.com/article/515301-today-in-commodities-a-tiresome-t...

There is an alarming increase in the disparity of calls in the market, wtr to commodities, the dollar and equities.  As traders the inclination to act is rampant.  Somebody here said everybody on this board overtrades.  I don't doubt it.

Everyone knows the market is at a critical juncture.  Next Wednesday, as it is ordained by the Fed to make their pronouncements determine direction, will speak.  It is end of April.  Irrespective of what is delivered the tone most importantly, and  content less so, will decisively determine the play of  the market.  That will endure at least until the fall.

Perhaps for a change we should decide NOT to act and wait on the sidelines.  It'll be a big move.  Better to lose on the upside than the downside.

"Where were the voices calling for a short SLW, short RGLD, short HL?  You just can't  go wrong with a short on HL. We totally fucking missed it.  Did anyone go short JAG at $7.32? I think it's safe to say that I didn't quite catch that trade!"

​When I joined this website silver was 36$ and shooting to the moon. I uttered a few bearish opinions in the comments under Turd's posts and was told I was a troll.

In the end I was very premature, but the point is when the mania is in full swing, nobody wants to hear dissenting voices. Everyone is too busy congratulating themselves on how much money they made.

Now everyone is a bear and bullish comments are being poo-pooed, so the turning point cannot be far off.

Precisely.  All I need to know is most people are bearish. I said a couple months ago that this site and every other forum out there can be used as contra indicators. I still firmly believe that.  We're definitely getting close to the All In moment on Gold-Silver.  

Natural Gas is realllllly close to it as well.  Once we hit 1.7... sell your house and put it on natural gas and natural gas stocks :) 

You know Rico, in my above post I had typed and erased "and no Rico, this is not more doom and gloom", but I thought it would not be nec'y. 

You seem like an intelligent person too.   Never heard "where the id is the ego shall follow"?  It's a universal law my friend.

One thing about the gold COT chart: the "March dip" was bought much more aggressively by the commercials than the much deeper "Dec dip".

Even though the drop in price was only half (in March vs December), the net commercial position moved up about twice as much.

The net commercial position is below what it was on Jan 1st, but not much below.

In other words, the COT is saying to me: "The price of gold could drop more from here, but probably not by much.  Probably gold will head back up soon."

It would be a very strange COT chart if gold took a strong drop from this point.  (Although something similar to that happened in Oct 2008 -- just after the Sept collapse of Lehman Brothers.)  If it does, though, probably buying the dip would be a good idea -- like it was in Oct 2008.

I'm not betting on this either way.  Just saying.

@rtabit,

Yes.  That gold chart basically shows what I'm trying to say.

But you are showing the "COT Commercial Index" which is not the same as the net position.  The net position was almost exactly twice as deep around March 1st vs December 1st.

Also my point is a bit more obvious using a daily price chart.    But you can see that I exaggerated a bit on the price.  March was not really half the drop (50%) of December, more like 66% of the drop.

But your chart roughly illustrates the point I was trying to make.

Hi all, many thanks for all your contributions. Thought I'd chip in.

I concur with the opinions expressed by some on this board that the relentless bullishness of KWN is anathema to trading,... I'm in awe that businessman James Turk thinks the Euro collapse will have $ silver punch to the surface like a ponderous beach ball held under too long by a feeble child. Rubbish! And I hope we're all sophisticated enough to know that just because trading depends upon an oppositional decision (to buy/to sell, up/down), the fact need not lure anyone into the fantasy that the agendas of so-called 'PTB' or so-called 'forces of darkness' are oppositional; hysterical commentators opine that "forces would love to see gold crushed"; the rise of Internet 'armies' would seem to bare this fantasy out (Keiser et al.); not to mention the romantic vision of the dollar gold or silver price as the prized trophy at the end of this long 'battle'. $4500 gold cannot be attained in a peaceful, free and bountiful world...surely? I heard a well-known silver-bullish YouTuber (naming no names!) read a user question from his blog. The question from some kid was -in its essence- "will our silver stash help us to finally elevate our social status into a new upper class of silver hoarders?"...no comment.

The truth is -maybe-, the electronic price of gold would still be at $400 if it would seem plausible enough, kept there either by government decree or algorithmic insistence. But since the sum total of expectation was for the price to rise relative to national currency, so the price was risen! A moot point perhaps. But I think we all know how expectations are continually managed. I would add that expectations are managed at an incomprehensible degree: every minutiae is carefully placed in predefined sequence and only when the exact conditions are met. A moot point indeed.

Which brings me on to a quick projection for price action: the meandering continues for the next few months, packed with infuriating false-starts and maddening death-drops, doves follow hawks follow doves follow hawks, algo-driven vertical faces that smooth in time to horizontal nothingness, position traders walk away in disgust or morph into day traders brave enough to fish for a scalp. The purpose, as I'm sure everyone here knows, is to have the bulls so tired when the price really does take a hit from a European credit crisis, that they are left holding the bag before the liquidity is finally freed/Dollar is devalued in response, sending prices to new highs in a flash.

The FOMC next week is interesting only insofar as how quickly the direction it generates is faded.

I appreciate everyone's work here, thanks again to all. I hope to make a meaningful contribution and learn,... or perhaps come here for catharsis instead of lugging the monitor through the window (I would describe my trading style as 'Keith Moon').

Welcome Seamless B. good bit. Get the keith moon avatar.

First this piece on credit worthiness. Top 10 bottom 10. US # 2 top 10 Spain #10 on bottom 10.

http://www.cmavision.com/media-centre/view/cma-release-sovereign-debt-credit-risk-report-q1-2012/

Gold

I think gold is a screaming buy all the way down to 1550 if it happens. I think end of this month beginning of next we turn up. Pull up monthly gold chart. That candle stick pattern is a reversal pattern. One up three down mostly contained within the one up. If it were 1 down and 3 up contained, it would be bearish.

Just have patience, don't push, and buy on the dips.

Silver

gold's little brother. He likes to exaggerate. He has lots of energy and once unleashed, runs ahead. But he will not leave his sister's sight and will not go anywhere without her. The true store of value is gold. silver is just too bulky. If armageddon occurs, then silver will be money. But if that happens, you can have mine because I will be moving on.

WTI crude

More disruptions. Happening in many places and not grabbing headlines....yet.  Higher prices here to stay.

http://www.bbc.co.uk/news/world-africa-17805806#

Just thinking about what Silverwealth wrote there about gold bulls having their balls handed to them on a plate following a Spanish debt crisis.

Historically gold would love events like this because it would be indicative of more money printing, but recently whenever liquidity is pulled out of the markets gold suffered too. Why the change?

I think the reason gold has started behaving like a normal commodity is that it's not gold we trade, but paper. Just like all other paper, when liquidity is withdrawn, down it goes. If there were no such things as gold futures or etfs then the only way to hold gold would be in physical form and very few people would borrow with massive leverage to do that. Gold would be a true safe haven.

Think about this the next time you turn to gold as a risk off trade....

Man that dude looks like he needs some sleep!

That cat looks like the lizard king.

Come on George at least wear some shades..