Post BLSBS

202
Fri, Aug 5, 2011 - 9:17am

Weren't the looks on the faces of The Shill and The Coug absolutely priceless? "What? An upside surprise?" Look, we don't refer to it as the BLS"BS" report around here for nothing. The BLS has the ability, through their goofy and worthless statistics like the "birth/death adjustment" to make their monthly reports sing in whichever manner they choose. Sometimes the data is so bad that it's impossible to touch up. Sometimes, like July, when the markets need a boost and a shot of stability, the BLS is able to goose the numbers just enough to take some pressure off. I haven't seen the internals of the report yet but I am highly confident that, once released, it will be plain for all who care to see.

Tucked away in the comments section of the blog from yesterday afternoon was this:

"BTW, upon further review, any BLSBS number tomorrow should be positive for gold.

Bad BLS: Ensures QE3. Positive for gold.

Good BLS: Provides "stability" for stock market. PMs recover, too."

And I suspect that this is true. Though there will be volatility today, there should not be any of the abject panic that prevailed yesterday. As I type, the S&P is up 9 points or so and gold is off $2 at $1657.

There are still plenty of reasons for the equities markets to be spooked, however. All of the funky stuff coming out of Europe should keep you checking the headlines this weekend. Expect more of the same into next week. Gold, having found a floor twice right near 1645, looks poised for a rebound next week. The question is the shape of the rebound. I suspect that, sometime today, we'll get one more push down toward 1645. Whether or not that level holds again will determine the shape of the short-term bottom. If I had to guess, I'd say it's 75/25 that 1645-50 holds for the third time and we rally higher from there. On the off chance it doesn't, I'll get my momentary drop to 1635. From there, I'd look for a rally and then a dip back toward 1645, giving us a cozy, little reverse H&S. The question for me is: Do I move my "stink bid" up to the 1645ish level or do I hope for the 25% chance of getting gold down to 1635. I'll keep you posted.

Silver is a similar deal, though the chart is flatter. I strongly suspect we'll get another look at 38.60 or so later this morning. Whether or not that hold is anyone's guess. I suspect it will but I would not rule out a quick dip that approaches 38. IF that were to happen, I'd be all over it. Unfortunately, yesterday's smash occurred just as traders were beginning to return to the silver pit. OI had finally broken through 120,000 but I'm sure we'll see it back under 120,000 when we get the numbers later today. Because of this, it will likely lollygag around between 38 and 40 for a while. You can bet your arse that The EE would be very happy to see silver contained in a little 38-40 box all the way through the Spetember "first notice day" later this month. For now, I'm just sitting on my puny, out-of-the-money silver spreads and waiting.

As I publish this, we've got a rally! S&P is up 14, gold is 1662 and silver is 39.30. Let's see what the morning brings. TF

12:30 EDT UPDATE:

For those of you who don't regularly check the comments, I apologize if you missed this:

Let's see if they goose the

Submitted by Turd Ferguson on August 5, 2011 - 10:44am.
MODERATOR

Let's see if they goose the market a little bit before/around lunchtime. Maybe take the S&P down toward 1170-75. Perhaps create a momentary pukejob in the PMs. I'll try to buy that dip.

And this:

OK. That worked.

Submitted by Turd Ferguson on August 5, 2011 - 11:10am.
MODERATOR

I got my pukejob. S&P held just below 1170.

I put on a 1700 vs 1800 spread in Oct gold and a 40 vs 45 spread in Sept silver.

I strongly suspect that the worst is over for stocks...at least for today. Don't be surprised if the S&P even moves back into the green this afternoon as dip buyers move in. The same should be true for the PMs. They will likely follow stocks back up.

More later this afternoon. TF

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¤
Aug 5, 2011 - 7:09pm

Divergence in Gold/S&P 500 Widening

Gold Up – S&P 500 Down

This chart gives a graphic example of the negative correlation between Gold and one of the other asset classes, stocks.

  • In Feb. 2011, the S&P 500 and Gold were almost the same value.
  • The closest the two were together was Feb. 2, 2011. Gold was $1,337.80 while the S&P 500 was at $1,289.80; a difference of 47, or 8%.
  • As of Aug. 4, 2011, the difference has expanded. Gold reached $1,649.80 while the S&P 500 fell to $1,200.07; a difference of 450, or 37%.


Eric Original
Aug 5, 2011 - 6:47pm

Gramp

Yeah, Sept and Oct are the traditional months for gut wrenching dumps. This is only Aug......

Gramp
Aug 5, 2011 - 6:42pm

Crazy week huh? So if the

Crazy week huh?

So if the Market is fragile now, what is going to happen as we go into October, isn't that one of the toughest part of the fiscal year?

I feel like bidding... yup, clicking and bidding for some... Ag!

RockinJohnnyT
Aug 5, 2011 - 6:39pm

@Eric Original

I with you, this was the dip I have been waiting for, I just keep buying and buying and buying, still keeping some dry just in case this is the big drop, I do not think it is. I think they are going to let Europe take the stage and show how bad it can get before they drop the hammer for our own QEIII (also to help Europe out of problems). Just what I think. I am hoping for all the miners to take off and make me some money so i can buy more coins..... Have a great weekend.

Quioxte
Aug 5, 2011 - 6:39pm

That's Ruprecht, The Monkey

That's Ruprecht, The Monkey Boy! Very nice!

Eric Original
Aug 5, 2011 - 6:37pm

Shiner "Blonde"

Ice cold.

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Quioxte
Aug 5, 2011 - 6:37pm
Eric Original
Aug 5, 2011 - 6:28pm

Beverage of Choice

Back in the good old days on the blog, we used to comment about what type of beverage we were spending our investment "winnings" on for a Friday night.

After this week, Sheeeeeittt! Just make it strong, cold, and lots of it please. Cheap would be good too, I'm a little short on cash.....

Eric Original
Aug 5, 2011 - 6:24pm

RockinJohnnyT

Thanks for the shout out on that Motley Fool article. Yes, we are back into "how cheap can they get? territory. Back into my own magic 32-34 range on the GDXJ also.

Personally, I'm longer on miners going into this weekend than I've been since....ever.

And also, I plan to do my homework on Alexco this weekend.

stoneeh
Aug 5, 2011 - 5:50pm

So, the intra-metals spread changes

Will that effect the price? I suppose not, right? The main and mini futures contracts margins remain unchanged.

- Markus

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Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

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