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Fast Market = Fast Update

259
Thu, Oct 27, 2011 - 10:39am

No time for dillydallying today. Things are rolling so let's get right to it.

Let's start with our two base commodities as the PMs are definitely drawing some strength from them. As I type, Dec11 crude is up $2.41 at $92.61. DrC is charging higher again, too.

paper_10-27amcrude.jpgpaper_10-27amcop.jpg

These two have given a boost to silver which is finally trading back above $34.

paper_10-27amsilv.jpg

Gold is lagging just a bit but the chart suggests that it won't be lagging much longer.

paper_10-27amgold.jpg

That's all for now. I'll have a more detailed update after the close. TF

1:10 pm EDT UPDATE:

As this epic drop in the POSX continues, look for even more downside tomorrow. As noted in the post from later yesterday, once 76 gave way, The Pig looked to fall into the abyss. As you can see on the chart below, 74 looks likely as a short-term bottom.

paper_10-27ampig.jpg

Dropping to 74 tomorrow or next week would likely be the impetus for gold at 1780 and silver at 37. TF

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  259 Comments

Jan Roos · Oct 27, 2011 - 2:52pm

I'd like to see Silver rally when the Stock Market is selling off. That would give me more confidence because to me it's still just acting like a commodity.

Cheers

Jan

Rowley · Oct 27, 2011 - 3:00pm

Amazing run this week. In at 47.60. 

Re: Spy puts. It's been oversold for a week, but that obviously doesn't mean anything. There's still a ton of liquidity that can enter the market. Waiting for the trend to point down rather than front the market. Could see SPY going to 130+ before it starts to correct itself. 

exiledbear · Oct 27, 2011 - 3:00pm

It always is that - prices in things people need go through the roof and everything else and I mean EVERYTHING - goes down in real terms.

The money supply isn't what triggers hyperinflation, strictly speaking, but it does indirectly affect what does cause it - and that's collapse of confidence in the currency. Actually once the confidence goes, you ironically find that there isn't enough paper money to go around to everyone. Weimar stories tell of long lines at the banks waiting on paper currency shipments, as people empty their bank accounts and spend as fast as they can.

Food became critical in the cities. Farmers often refused to trade in currency for food. The only things they would take were tangibles, like pianos. I don't blame them either - farmers in general get the shaft and a hyperinflation is one of the few times they get to stick it back to everyone else. Not sure what today's "piano" would be, but I'd start thinking about it. That is, if you don't already have a position in the precious metals already.

Butter became something of a currency. Don't ask me why. Maybe it's a German thing.

Other stories - a bellhop saved a gold coin tip and later on traded that coin back to own the hotel he worked at. You could buy Daimler-Benz for about 100 of the cars they made.

It was the age of the speculator. If you knew how to speculate, you did well. If you came from a country with a sound currency, you did well. Morals loosened, every other girl was a hooker and everyone was snorting coke.

Tom L · Oct 27, 2011 - 3:02pm

Bonds are selling off and money is rotating into stocks, as per normal. If there's money printing on top of it then it's going to send the SPX to the moon, along with gold. I would only go short on the financials at this point, and only NTM puts for a short 48 hour turnaround when the market is seriously overbought short-term.

That's what I'm looking at right now... MS is looking seriously overbought right now at $19.40, especially with an max pain at $16 for November.

Ta,

JimmyTheHand · Oct 27, 2011 - 3:03pm

Guess there is so much demand it's hosing their web site.

Shill · Oct 27, 2011 - 3:03pm

Looking at the dollars continued heading into the Abyss, I would be a bit skeptical about those Put positions at the moment.

SHORTS ARE NOT ALLOWED IN THIS MARKET, or so it seems. If your buying Puts, I would buy either January OTM or December OTM at best, or what ever suits your fancy. We may have a good run on our hands here for sure. Also take into account this is an election year, must paint the tape green for our sitting Chairman.

Think 09 when the world was coming to an end, it was endless green as far as the eye could see, many missed that run. Sure we will have a bounce, but right now its all Hopium European style.

Has France lost their AAA yet?

Be well

ewc58 · Oct 27, 2011 - 3:06pm

Agnico-Eagle Mines' CEO Discusses Q3 2011 Results - Earnings Call Transcript

And Goldex, as we've said in our last week's call and we'll talk a little bit about that again today, we did decide to suspend our production indefinitely. And essentially, that results in us taking out one of our better performers. In Q3, they produced 40,000 ounces at a cash cost of $411 an ounce. So going forward, having to remove one of our lowest cost producers and a steady performer, which is about 15% of our production, is clearly going to impact not only our production but our overall total company wide cash costs. read more

More on AEM: Agnico-Eagle Plummets On Goldex Mine Write-Off by Bob Kirtley Agnico-Eagle VP On Kimber Resources Board A First Step Toward Acquisition by Thomas Kelly
¤ · Oct 27, 2011 - 3:08pm

...and I get the direct message and see it as a very, very patient warning.

No problemo here TF.

Now...how about those markets? Just checking oil before I do a errand.

WoW! $96 by tomorrow? Better fill the gas tank up tonight.

backseatdriver · Oct 27, 2011 - 3:11pm

Once again, a rally on the nearly broken back of freedom and liberty. Although I am happy PMs are on the move, I am sad that puke and fake rally mentality of the central bankers and Keynesians is still so pervasive. We still have much work ahead of us. What a great day this must be for Krugman. 

BSD

Shill · Oct 27, 2011 - 3:12pm

Bonds are selling off and money is rotating into stocks, as per normal. If there's money printing on top of it then it's going to send the SPX to the moon, along with gold. I would only go short on the financials at this point, and only NTM puts for a short 48 hour turnaround when the market is seriously overbought short-term.

Agreed Tom I am still holding worthless XLF Nov Puts, maybe I will break even. But agreed anything as far as shorting using Puts, trade it don't hold it long term. Its the swings that caught me off guard last month.

Oh and Tom desperately seeking a TBT close of $23 :)

SLV looks done for the day as its been capped since noon. Managed a nice gain today, still holding.

Rowley · Oct 27, 2011 - 3:12pm

One more thing: Not only are bonds selling off, but so are treasuries. That money will be going into equities which can, and most likely will, send the SPY much higher. Personally, I think the risk/reward favors calls.

Shill · Oct 27, 2011 - 3:16pm

Europe debt deal depends on China-- The Buzz - Oct. 27, 2011

In this photo, Hu is thinking to himself: Is that a Cruller in your pocket or you happy to see me.

ewc58 · Oct 27, 2011 - 3:26pm

Eric Original · Oct 27, 2011 - 3:27pm

Ebay gold just arrived! A pair of Danish 20 Kroners, bought on ebay when gold was $100 cheaper. Does it get any better than that?

Psst, don't tell Mrs. O though!Denmark gold coins

Last Rebel · Oct 27, 2011 - 3:27pm

A Turdite's kind of day:

Pressure canned 10 lbs chicken
Bottled a 12 pack of home brew
Popped a few mags of .45
Little bit of garden work
Added to compost pile
Looking at chicken coop plans
Getting ready to take my dog for a walk
Phyzz went up, more on the way

Only con as BSD said:

Watching most of the world rejoice as common and economic sense swirl even further and faster down the bowl. Blessings all.

Shill · Oct 27, 2011 - 3:28pm

And there is my $23 Tom...nice!

https://www.marketwatch.com/investing/fund/tbt

Sorry I have to F-bomb...400 Fuking DOW POINTS! incredible.

Shill · Oct 27, 2011 - 3:30pm
  1. Alcoa’s billion-dollar day

Nice day for ALCOA...

Dr G · Oct 27, 2011 - 3:39pm

@last rebel,

super jealous of your day. Sounds perfect to me. Well done!

(we canned 40 lbs of chicken last weekend, and I ordered and received 4 more LifeStraws to add to the collection.)

ewc58 · Oct 27, 2011 - 3:39pm

Wisdom of Jesse Livermore 6

Adam Hamilton October 31, 2003

"Legendary speculator Jesse Livermore is surely one of the most fascinating characters in all of financial-market history.

About a century ago Jesse Livermore blossomed into one of the most celebrated speculators of all time. He was trading heavily in the early decades of the 1900s, a wondrous era to speculate in stocks. His renowned exploits are still viewed with great awe and reverence by today’s elite speculators and his towering speculation wisdom will stand tall for ages to come. If you are interested in more background information on Jesse Livermore and my reasons behind writing this series of essays on the man’s awesome speculation wisdom, you may wish to skim the introduction of the first essay in this series.

Mr. Livermore’s exploits were recorded in the greatest book on speculation of all time. Originally published in 1923, it is called “Reminiscences of a Stock Operator” and was written by a gifted financial journalist named Edwin Lefevre. Mr. Lefevre penned the account as if from the first-person perspective of a fictional trader named Larry Livingston. As Lefevre had spent weeks extensively interviewing Jesse Livermore, market historians are virtually unanimous in viewing Lefevre’s classic book as a thinly-disguised biography of Livermore’s trading life.

Today “Reminiscences of a Stock Operator” is fondly read with awe by speculators of all levels and abilities all around the globe. I have personally read the book many times and I try to re-read it at least once a year now. The speculation wisdom contained within these magical pages is just awesome and truly priceless for all speculators to digest. 

Jesse Livermore’s words and experiences are so endearing and powerful because he presents himself as just another mere mortal like you and I, with hopes, fears, and frailties. He is brutally honest in critiquing his own evolution as a speculator and thoroughly explaining his own mistakes and the great wisdom they ultimately led to.

In this series of essays Jesse Livermore’s wisdom is presented chronologically from the book. All the bold-faced passages below are his words directly out of Lefevre’s book, while the following normal text is my own feeble thoughts and commentary attempting to pull Livermore’s wisdom a century into the future to today.  Before every quotation below, the chapter in “Reminiscences” from which it is pulled is noted so you can quickly find it and dig deeper by reading the valuable surrounding background context if you wish.

I hope and pray that you find Jesse Livermore’s awesome wisdom as exciting and valuable as I have!"

Read more

Gramp · Oct 27, 2011 - 3:46pm

https://money.cnn.com/2011/10/27/markets/markets_newyork/index.htm?iid=P...

Dow soars 350 points on Europe deal

By Hibah Yousuf October 27, 2011: 3:04 PM ET

The gains also pushed the Dow above the 12,000 mark for the first time since Aug. 1. The blue-chip index is headed for its best month since August 1982.

Stocks have been rallying on the promise of deal to tackle Europe's debt saga since the start of October. That long-awaited promise was delivered, with a eurozone debt agreement announced early Thursday, following marathon talks aimed at finding solutions for Europe's debt and banking crisis.

u.s. stocks

"We can't forget the Europe is basically in a recession, and that this plan will do absolutely nothing to address economic growth, or any kind of problem that might pop its head up in Italy or other eurozone countries."

redwood · Oct 27, 2011 - 3:50pm

Livermore is a jewel for any trader/speculator. Written in an era that is no long familiar is alluring in itself. Livermore's astute observations clearly reveal his wisdom, intellect, speculating wizardry. I have compiled a few notes myself and if I have the time will share with this blog.

ewc58 · Oct 27, 2011 - 3:55pm

Mr. Fortinbras,

Wondering if from your unique perch you might be able to shed any light on the issue of recent problems with our recon/assassination drones in terms of their control or guidance systems going buggy.... perhaps via the introduction of a competitor's stuxnet-like virus or other nasty bug?

Similarly, please pass along anything on the notion going around that the F-35 Raptor fleet is currently grounded, supposedly due to sabotage via buggy, Chinese made chips that the USA now has to root out and replace, one by one... Of course, if our "leaders" have their way, the Chinese garbage will most likely be replaced with the Israeli equivalent...

Share what you can w/o risk, and thanks for your views in advance.

exiledbear · Oct 27, 2011 - 3:57pm

It is the sitting on thumbtacks that makes you the money. There's a reason the "sitting" is so hard for most people to do. It was damn hard for to do back in 2005. I was sitting on losses for several years there, there were plenty of reasons to quit.

It gets easier to sit on the thumbtacks though. Maybe my ass has gone numb or I've gained more discipline. I don't know.

Eric Original · Oct 27, 2011 - 4:03pm

Interesting responses to my "Crash Season is Over" post. Everyone is entitled to their opinion, that's what makes markets. Plus I don't mean to imply that it's all rosy from here. Just saying that the usual Sept/Oct "edge of the abyss" period is over.

Also, whether you think it's real, manipulated, or papered over, Crash Season is Over just the same. JMHO cool

I anticipate fairly normal (what is normal anymore?) markets from here into next April. At which time the "sell in May and go away" idea will be good advice once again, after which you must tread lightly until next years "Crash Season" gets over.

ps, this year we didn't get much of a chance to "sell in May" because we got swacked on a Sunday night before the first trading day of May. So keep that in mind and lighten up next April.

Shill · Oct 27, 2011 - 4:07pm

Also, whether you think it's real, manipulated, or papered over, Crash Season is Over just the same. JMHO cool

The money is real Eric thats for dam sure lol...Glad you hit it today M8ty, and nice coins. I plan on making a purchase next week as I just had a delivery. And like you Mrs. Shill will have a baby if she sees another arrival in the mail ha ha ha.

Tom L · Oct 27, 2011 - 4:09pm

It couldn't hold $23, but it looks primed to run to $24.

https://stockcharts.com/h-sc/ui?s=TBT&p=D&yr=0&mn=6&dy=19&id=p2917392480...

I had 30 $25 Nov calls this morning. Paid $0.13 for them. Sold 20 at $0.22. A move to ~$24 would net me another $0.18/contract. At this point, beer money for me is a lot. I'd be ecstatic if that happened. 

Ta,

Eric Original · Oct 27, 2011 - 4:09pm

Gotta stop counting my money today and go run the dogs. Pure Joy! Catch you guys later. yes

Video unavailable
Eric Original · Oct 27, 2011 - 4:11pm

Are you like me, just praying the mail man doesn't come to the door for a signature while the Missus is home?

Shill · Oct 27, 2011 - 4:14pm

LOL! YES ERIC! ha ha ha

Thanks TOM looks good, hopefully we nail it. Nice grab at least its not a loss. Me I am holding out for a better day as well

JackPutter · Oct 27, 2011 - 4:16pm

make up the perfect extortion lever to force nations to act in a certain way.

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