Re: Tonight. I Have No Idea.

492
122
Sun, Aug 7, 2011 - 1:26pm

It's Sunday in the U.S., a little after 1:00 EDT. The Globex opens in about five hours. There seem to be quite a few people who are interested in my opinion regarding how the metals will trade tonight and tomorrow. Frankly, I have no idea.

First of all, I've been on the record saying that I didn't think a ratings downgrade was coming. Oops. Shows you what I know. I am still stunned that it happened. Of course it needed to happen and AA+ is still too generous. A or A- would seem to be more fitting. However, since there is no principal risk in U.S. government debt (the Fed can print all the money they need to pay off bondholders), AA+ is OK, I guess. Now on the other hand, if S&P started taking inflation risk into consideration and began to factor in that you're really only getting 50c on the dollar back in principal purchasing power...well, lets just say that U.S. debt would be relegated to junk status. Regardless, U.S. debt is now rated AA+ and the effects of this will be far-reaching. We'll go into this in greater detail later this week when I have more time and can think more clearly. (For now, I'm a little hung over and I need a nap.)

As it pertains to the PMs...There is NO WAY that this news is not bullish. Extremely bullish. In the intermediate and long term. What you don't know about is tonight and tomorrow. As we saw last week, when everything else is being sold, the PM "baby" often gets thrown out with the bathwater. Gold should open UP at least $50. It should trade UP $100 tomorrow. Will it? Again, who knows? Gold may open higher and then get instantly battered lower in a global rush for liquidity.

Just watch. U.S. debt gets downgraded but the POSX and the long bond will both probably trade higher in a flight to safety. Oh well, it doesn't really matter. Like I said, gold may be down tomorrow. Who knows? But what I do know is this: Gold will be higher a month from now. It will be higher six months from now and it will be higher still a year from now. In that context, what happens tonight is of no consequence. 

I'll try to have an update this evening, after things have been trading for a while. Until then sit back, relax and enjoy the fireworks. TF

11:55 pm EDT UPDATE:

Too tired to type but I wanted to give you this update with these levels to watch overnight and into Monday.

paper_8-7pmgold.jpgpaper_8-7pmsilv.jpg

Turd nite nite now.

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  492 Comments

Tom L
Aug 8, 2011 - 10:19am

Watch miners closely

The good ones are starting to diverge from the general market and are trading up while the Dow is getting sold. This is the time to start picking the short to medium term winners. Look for higher lows and double bottoms or just general bullish posture.

I'm loving the price action in AUY, btw. If it holds $13.30 against a rout in the S&P that's a very bullish stance IMO.

Ta,

Tom L
Aug 8, 2011 - 10:20am

USD Looking heavy at 75.

If that gives way, Gold is going to skyrocket... or conversely, if Gold skyrockets the USD is going back to 74.

Ta,

mrgneiss
Aug 8, 2011 - 10:24am

Bobby, if you don't have to

Bobby, if you don't have to sell then I wouldn't worry.............

llaettner Tom L
Aug 8, 2011 - 10:25am

Too many clown pairs for USD index to weaken

Several reasons index wont fall below 74 anytime soon, JPY, EUR, and weakening in Aussie. Too many people contracting the American cold, America get cold, Europe gets Flu, remember?

Dr Durden
Aug 8, 2011 - 10:26am

YES! S&P just took out the

YES! S&P just took out the 1165 level. Now take out 1100 and Daddy gets a bottle of Don Julio 1942 tonight!

bobby
Aug 8, 2011 - 10:27am

what?

me worry?

I expect some exogenous event to happen soon that will remove a lot of mystery about the trend.

Tom L Dr Durden
Aug 8, 2011 - 10:36am

1154

Is the 200 wk MA, I misspoke earlier. A break of that and 1050 here we come. 

QE3 will be enormous if that happens.

Ta,

ancesthntr
Aug 8, 2011 - 10:40am

"YES! S&P just took out the

"YES! S&P just took out the 1165 level. Now take out 1100 and Daddy gets a bottle of Don Julio 1942 tonight!"

Last week I bought some SPXU calls last week, mainly because I "just got that feeling" that the market was a top spinning out of control. They're the December 18s which I bought for $2.55, and SPXU is now trading at $22.17 so I'm making some big fiat on that. [Correction, $22.36 now.]

I also have some ZSL puts, and while I'm making some money on them it isn't quite so much because of the PM sell-off last week. But these expire in November, so I'm holding tight with the knowledge that I'll be making a bunch as time progresses. The ultimate plan for much of this fiat is to buy silver, with the hope that the leverage on trades that are highly likely to pay off will more than offset any gains in silver. 

padow
Aug 8, 2011 - 11:43am

1st time post...

hello turdites!

First off... Thank You to everybody here, and a big Thanks to the Turd, himself! Been following for a while and have had quite the education in that time.

I have a question that has been sitting in the mind and I figure this is a good time to get it out... I have a 1968 Camaro SS that can pull about $40g's... This thing is absolutely beautiful! She is a very hot momma, having to run on high octane (115) fuel, and unfortunately, it's getting harder to play with her. Is it time to pull the plug? When the shtf and beyond, is she going to be of any real monetary value? Is she a long term play and I just keep her covered up? Any help is appreciated, guys and gals! I hate to give her up, but sometimes you gotta do what you gotta do...

padow

question
Aug 8, 2011 - 11:59am

My .02C=trade the steel for

My .02C=trade the steel for shiny yellow

Fiend's Brave Victim
Aug 8, 2011 - 12:15pm

@Padow

Don't know the rest of your financial situation Padow, but I sold a perfect, investment '97 SL500 this year to get PMs and liquidity. I'd be blown out of the water trying to learn to trade late last year, but even so, my thinking would be the same:

---likelihood of tax hikes on fuel, I'm in the UK, you don't even want to know what this thing was costing to fuel, but you might have read what our government is like on fuel tax when they need to make a quick buck

---inflationary pressures on fuel prices and maintenance. If oil prices go up 50%, it's probable that, here at least, the car's value would plummet short term along with it, so not only would running it be more expensive, your options to sell would be much more limited.

---possibility of civil unrest. I live in London, and I don't know if you've seen what just happened here on the weekend. Fortunately I am nowhere near where it happened, but I suspect it will spread, and would not want an investment car like that to be sitting around. Hell, I'm even getting private parking for my current 528i, even that is too valuable to me to have busted by some idiot gangsta kid. It's my getaway Batmobile!

---liquidating unnecessary assets. I also sold a fairly valuable Gibson guitar, some computer gear, some clothes. If it all goes as tits-up as it might, all of this stuff would be left behind anyways, and I wasn't using it, so why have it lying around?

My car would have been a very, very good long term investment, as I'm sure yours would be. But I dunno man, too big a risk for me. Good luck with your decision!

Jimymac padow
Aug 8, 2011 - 4:08pm

It's your call

Padow,

https://www.hagertypriceguide.com/indexes/#1

You want Gold and Silver, not Steel at this moment in history.

Jimymac

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