Sentiment Naturally Changes With Each Skirmish, As The Financial War Proceeds

Mon, Jul 3, 2017 - 8:38am

I listened to Craig in his pretty unique podcast of this Independence Day weekend, ( TFMR Podcast - Friday, June 30 ) and I totally appreciate his honesty and candour, and value that. Not many business owners have the chutzpah to openly discuss their difficulties with clients. It indicates humanity, honesty, ability to talk about difficulties and what is being done about them, during the process. And trust in their clients, which can only be built up incrementally over time. Weaker individuals wait until afterwards before saying anything that might show less than an invincible public image, if they ever dare say it.

I think that Turd isn't doing anything "wrong" when a decline of subscribers becomes visible, though I am sure a lot of soul searching goes into it, because business is important.Seafarers have to sail through storms to get to the other side, that's all. Unfortunately this is simply the bear grinding out the bullish element to incentivise the move of assets away from weaker individuals and over into the "right hands". After the property is owned by "the right pockets" it will rise in price. It has always been so since capital could be used in a weaponized way, which was of course the end of capitalism there and then ... a longer time ago, I believe, than many people think.

And when Turd requests that conversation about crypto currencies be kept to certain places (on this site) instead of all over the site he strives against the proponents of a competing asset to precious metals, and precious metals interested groups. Think about all this in terms of the effect that defeatist talk during an ongoing war time situation has upon morale, and how that morale has it's own effect upon the outcome of the war itself for those who were making the defeatist conversations.

So why that interest in digi-FX? Well for one it's a technological new thing with all the mysterious possibilities that new products seem to offer. And for another thing it appears to be a way out of precious metals for those who can't take the heat for the duration required, and who want an alternative asset which appears to be a hard asset. Saving face while walking out the door in other words. For some, not all of course. Everybody's different, but groups do form from individuals, right?

Another use of my "this is a financial war " metaphor: there are many kinds of wars. For instance there might be a pitched battle, or, a running battle with skirmishes along the trail, or, there might be a guerrilla war with skirmishes at unpredictable locations. But whichever type it is, all occurs in a complex timed sequence where timing reflects dynamics of preparation and transport to the location of the following skirmish. Like acted out civilian attacks require preparation, as do real ones. We understand the need of hidden parties to prepare and gather resources, no matter which side they are on.

Well, in financial markets, there is no requirement on us to fight a pitched battle and lose to a bigger opponent. We can always get stopped out of a loss making trade, and then stand aside until it all pauses again. We have no mission, in a trade, other than to benefit from it. This can be compared to Turd's relationship with the part of his TFMR member investors who have not yet learned this, and who become emotionally despondent when the price goes down. They look to him for guidance, motivation, and by implication, resilience.

But when you begin to look at it this way, you realize that the market is a funny mix of war styles. If I stop myself out of a purchase, and stop being long because it's going down at that moment, I can go short, switching sides, or I can stand aside and wait for a better opportunity to go long, short, or stand aside again.

Here's the big difference: While I stand aside, other people go in and duke it out with big brother. So the big pitched battle still goes on. It still happens, even though I choose to be a guerrilla and come back later when the odds favour me more than right here right now. And in the meantime I get to listen to the pain and screams of those out there in that big pitched battle. That affects me because I was out there, and I will go out there again, and I have to not let that change me. Their pain must not alter what I do. If the survivors of the pitched battle come away bloody and hurting and decide to go fight a different foe next time, I must not follow them as they journey towards what may become their next big mistake. I don't want their recent track record to become mine.

I watched and waited while they did damage to my foe, and I then waited until the bell sounds for the following round, and then I can tag team right in there to see how weak big brother has become since last we sparred together. I pay attention to how long it takes to get stopped out of my trades, or to get hurt in sparring matches with my market colleagues, compared with earlier episodes.

This applies to gold investors moving to digi-FX, or it might apply to some of them. As for me, after studying the risks and methods of fighting my particular foe, I'm not about to change foes with out taking a big loss - not in money lost - but in research done not yet turned into profits.

In my view we are now within 18 months of the climax, (not the end,) of a global financial market ruction. And already within 12 months of that phase being "well started and in motion".

For Main Street only readers who don't go into the TFMR forums, I run the thread The Setup For The Big Trade, I have been advocating stops and their value for readers for a few months now. The regular readers there, I believe have figured out my style by now, giving clues they have to figure out for themselves, and they understand from my repeated reminders about stops that what I consider possible right now may be extreme, and that I'm referring to monthly chart sized moves when I say it.

I read comments all the time saying things like "Nobody can predict when ..." and such like. Well I'm telling you, market timing is what I do. Believe me or don't, it's your choice of course. There are and have been and always will be others who claim to do this. But it's what I do. And I don't speak for anybody else, just myself. That's all.

I started Setup forum in January 2013, so there's plenty of material and track record to go through and ascertain if I actually do what I say I do and if it works or not. And since the April-May 2013 pivot was made by gold my date for the ideal end of this bear hasn't altered.

Though I admit the Dec 2015 low was convincingly low enough that it could be setting up a double bottom, or a lower low followed by a higher low three years after that.

But my preferred scenario has always been for, following a multiple year trading range, a rout of gold bulls towards end of 2018. My alternative scenario was to be "wrong", as if someone can be wrong when forecasting a market (wherein forecasts affect the outcome!) as I said, my alt scenario has been an analog with British Petroleum whereby a low around now would provoke the precious metals to move sharply to the upside from a 2017 low, instead of after the next low after this years low.

Well, either it takes off now, or more likely it tries, makes a 2017-2018 high and then takes out remaining gold bulls with a sharp downswing during the coming 12-18 months. How to deal with such a different possibility? Long term stops is all there is after timing has been put aside.

If one does not understand the effect price change itself has on one's mood, mind, physical effects on one's body via stress etc, one simply can not withstand the pressure exerted by a price swing to make one do make certain trading or investment responses. If you see the strings pulling at your world view - and tweaking your actions - you might cut them for a while.

So here is a question every single one of us has to ask ourselves as sincerely as possible:

"What effect has the price changes of gold, during the past three years, two years, year and this year 2017 to now, already made to my worldview?"

I suggest that the answer, if honestly given by inner self to daytime self will be something like this: (a) it got me to where I am financially (b) the effects as far as I can detect them are deleterious to my trading success (c) since nothing has changed this will continue and (d) something needs to be changed to increase my investment outcomes.

Now to take this back to the honest remarks made by the owner of this site, Craig Hemke, or Turd as we affectionately call him. His success is connected to the resilience of it's members, since he is in a role of navigator of a ship passing through a dangerous period or place. He could "go all stock market" on us and in so doing pick up some easy business over there where ebullience and euphoria are present. But he hasn't. He is doing the hard job and it can only be done the hard way.

Back to the house of cards that is the global economy. The people, entities, institutions, in charge are shifting their pieces on the chessboard of geopolitics to a defensive attack structure. For example, if you hear neocons talking openly about "winnable pre-emptive nuclear strikes", this is representative of how that looks like to one party, one group, one single interest group (or gang) out there. These groups/gangs plot to gain advantage according to how desperate they are. But IMF, BIS, et al - they are all also acting in their own self interests too (their 1st priority) , and trying to allow prosperity spread out there (their 2nd priority). As with the neocons and every other group, they are hoping and doing whatever to increase their odds of winning out overall.

So I look around, studying what is visible, always looking for the next project of the world's fascisto-banko-financialized-global-predatory-capitalistic leadership factions, or the next weakness in their castle of institutions, or the next trap they will spring upon the public to seize more of it's, our, assets.

I'm looking for earliest visible signs that one of the scenarios described above, is playing out, and which one it is.

At the moment, my eyes are looking carefully on the Japanese stock market. It has correlations to other asset classes, and in a way it summarizes the pricing balance between those other correlated assets. I think the Nikkei 225 has risen to an interesting price, at an interesting moment in time, and what happens next will be predictive of other events. This applies to gold in Euros too. There is an equivalent fork in the road for the bond markets. Several asset classes are at it or coming to it relatively soon.

Here is an old tune that might strike a chord: Harry Chapin - Dance Band on the Titanic.

So is this a depressing song that summarises gold buyer confidence? Did you jump to that conclusion first? "Tut! Tut! " say's I to that idea, wagging my finger reproachfully! Programming from outside! Programming and strings tugging inside!

Maybe it can be (instead) looked as an allegory for the shiny Keynesian global economy and the confidence still vested in it, mainly by its beneficiaries. There's two sides to every coin. But if you flip a coin, the odds of either outcome is 50:50, and random. The global economy, not so random. After it goes up, it always goes down. Gold however has already gone down. It's a pre-disastered asset class!

Not quite the same as this one:

Heh Heh! How funny he was. I miss Robin Williams. On top of the world and being killed by it at the same time! Poor fellow! Ar dheis Dé go raibh a anam (translation from Gaelic)

As for my choice of that Harry Chapin song: it came from me checking into dates and popular sentiment (again). What a title to write a song about! Well, Harry Chapin, released The Dance band On The Titanic in 1977. Is it a sign of a stage in popular sentiment back then? You take your guess on that. But I just let you know that that's something I thought about, and then I looked into before moving on.

What were the stock markets, bond markets and gold doing back then, and what did they do afterwards? Any similarity to today? No need to get too serious about, it's only a provocative question regarding sentiment.

But here's a reminder for what the Dow looked like around the time that Harry Chapin felt motivated (popular sentiment) to think that song up:

Well. How about that? A decade of stagflation, a big bear, and a rally off the third major low in that bear, and that year was around when the rally began to run out of steam.

Was it Yogi Berra who first said: "It's deja vu all over again."?

Because it might be just that:

The Dow today looks like this:

How about that? Not exactly the same. But the two periods do show some things in common. The scale could be different. We seem to have more inflation of financial assets during the rally after low #3 this time. This iteration of the behaviour of those who drive markets looks a lot bigger to me. Bigger might take longer. But now you know how long I think it will be.

To those of you celebrating this weekend. Have a great one.

Best regards,

Argentus Maximus


The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmAndPrice. The author advises that he trades and holds market positions in accordance with his own opinions.

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Jul 3, 2017 - 1:25pm

AM on the physical markets

It all depends if the EAST will pull the plug on the LMBA/CRIMEX. AM said on July 5 prob ABX and HKMEX open only (July 10/11) will finally do them in. Give it a week or two to see if they are using separate pricing model that will induce arbitrage between West VS East. That my guess anyhow if the EAST are going to do it or not.

Jul 3, 2017 - 11:53am

@argentus maximus

Argentus reading of the psychology of Turdites is I believe pretty accurate.

This deliberately engineered bear market has been grinding away since Sept 2011 and seems to be carefully crafted by the major central banks, and implemented with efficiency by the major bullion banks.

The manner in which this bear market is being managed, is classic psyops. The objective; to grind the (western) PM bulls' fundamentally positive outlook into dust, with counter intuitive declines; waterfall declines for no apparent reason - a bit like an unseen drone firing a missile at an unsuspecting enemy. That is varied with sharp increases in price designed to lure back into the game, those bulls waiting patiently on the sidelines, only shortly thereafter to crush the price in a series of waterfall declines; the price action in the last several months of 2016 being a classic example.

Our opposition is the wealthiest, most powerful, and ruthlessly efficient financial leviathan the world has ever known. This is a marathon, but the good news is; they are losing, and we are winning, (with the unrelenting physical bullion demand from the East), although that often does not appear to be the case. It is human nature to focus on the day to day action, however, to maintain one's sanity, and to keep things in proper perspective, one needs to stand back and use an objective mind and clear eye to look at the big picture.

Slowly, but surely, the declining availability of physical bullion is is gradually impinging the bullion banks' freedom to push the price down with impunity using 'paper' gold and silver, despite their added advantage of HFT and algos. This embryonic trend IMO will steadily gain traction with the passage of time, until the LBMA, Comex and Globex are forced to re-set the Gold and Silver bullion prices as a result of their inability to meet the ongoing robust demand for physical bullion, or through a recognition that they need to retain a certain level of physical bullion inventory to meet the challenges that loom just beyond the horizon.

One also needs to keep in mind the increasingly tense geopolitical game that is being played out before our eyes on the global stage, of which Gold and Silver are considered by the East as a key element in the their vision for a stable future international financial system.

This is for all the marbles.

Jul 3, 2017 - 11:29am

This past week in gold

Jack Chan
Posted Jul 3, 2017

GLD – on sell signal.


SLV – on sell signal.


GDX – on sell signal.


XGD.TO – on sell signal.


CEF – on sell signal.


GDXJ – on buy signal.


Speculation in gold is now at levels of previous bottoms.


Speculation in silver is now at levels of previous bottoms.


Long-term – on major buy signal.
Short-term – on mixed signals.
Gold sector cycle is down.
A major consolidation is in progress but now near completion.
Holding long for long-term gains.


Jul 1, 2017
Jack Chan

Jul 3, 2017 - 11:17am

Thanks argentis

Always a pleasure and enlightening to read your views.

Jul 3, 2017 - 8:58am

Thanks Craig.

Thanks Craig.

Jul 3, 2017 - 8:56am

Thank you Argentus

Great post full of great information. Very much appreciated!

Key Economic Events Week of 9/21

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9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

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Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

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