The setup for the big trade

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Fri, Jul 8, 2016 - 5:53am
Wy So Lo
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Touches on copper

Fri, Jul 8, 2016 - 10:09am
Pete
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ESU Friday AM

Sat, Jul 9, 2016 - 4:36am
Pete
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ESU

An expanded pivot formation (EP) is evident in ESU now. EPs are often termination patterns, in this case a potential termination of the rally from the Feb low. Put options on SPY have come way down. Looking at the Oct expiration.

A careful look at the 60m chart of July 6-8 shows an EP too, with termination at the high bar today.

Sun, Jul 10, 2016 - 4:21am
ivars
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Question remains what was so

Question remains what was so different with QE3 or its perception that gold price dropped during QE3 inversely proportionally to QE3 size =inversely proportionally to increase in Reserve balances with FED during QE3.

And has the increase in interest rate paid for excess reserves from 0,25% to 0,5% been positive to gold price while at the same time FED funds target rate has been increased to 0,25-0,5% ..which means that rate is actually set by interest on excess reserves.

At the same time we know that stock prices has been increasing proportionally to bank excess reserves at FED during QE1, QE2, QE3- there has not been change of behavior during QE3 as in gold prices.

QE3 also marks first divergence at stock and gold price directions-stocks continued to move higher while gold went down - diverging almost 40% in each direction

Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation. P.A.M.Dirac
Sun, Jul 10, 2016 - 4:59am
atarangi
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logical thinking?

What is logic.

The science of reasoning?

Problem is that reasoning is only as good as the available facts.

The playing field has been set up with manipulative bias.

Logic has become a minefield.

The laws of physics have changed!

Oh well, back to the drawing board.

In high tide fish eat the ants, in low tide ants eat the fish. - Thai proverb
Sun, Jul 10, 2016 - 8:25am
ivars
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It happens that gold prices

It happens that gold prices behave the same way as TIPS prices since 2009:

https://scottgrannis.blogspot.com/2016/07/gold-and-tips-joined-at-hip.html

Which means gold has been bought mainly as inflation hedge such as TIPS. Since inflation expectations went into overdrive, as did gold and TIPs prices, at the beginning of QEs, but in reality no inflation was present, gold and TIPS suffered correction exactly during QE3, as QE3 opened doors to price increase of other attractive asset- stocks, and funds were moved out of unnecessary inflation protection and into stocks. This in turn makes clear that all other reasons to buy gold- except as inflation hedge -are still very weak and does not steer the behavior of majority of gold market participants but remains marginal. 

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So: since gold prices have risen in line with TIPS prices, does that imply that gold is pricing in weaker growth expectations? That's possible, in the sense that weaker growth increases the likelihood of unpleasant policy surprises. Central banks might over-react to persistently weak growth by easing too much, which in turn would give us unexpectedly high inflation in the future. Politicians might over-react by passing "stimulus" legislation that has little or no ability to actually stimulate, but instead only weakens the economy and perhaps endangers certain sectors of the economy. Think higher taxes to fund more transfer payments, which only end up resulting in less investment. The rise in gold prices could thus be signaling that the economic outlook is becoming uncomfortably "clouded," and thus there is an increase in risk that cannot be hedged by traditional means. Enter gold.

Interesting take here- TIPS and gold prices start to increase because of lower growth at low inflation expectations which may create responses that are inflationary.

For example, as FED increased target rate and at the same time interest on excess reserves-excess cash of banks in FED- to 0,5%, it is clear that US banks would not be lending to anyone at less than 0,5% anymore . Which in turn may tighten borrowing conditions.

Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation. P.A.M.Dirac
Sun, Jul 10, 2016 - 9:48am
Solsson
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S&P 500

Is S&P500 about to break out after more than a year of consolidation?

Is it possible to get a higher B than the higher level cycle wave 1 (C-1) a fractal layer above B ? I think it's dangerous to try to short the Spx here. The moment up is quite strong. Lets see how next week unfolds.

The green line is the esoteric trendline from the past. The resistance line that Peter Eliades stated was almost a physical limit for S&P500. It has never been broken in the history of the world of Spx.

Interesting times smiley

Edit:

Btw, is it possible to get a B wave in Gold above the last top in 2011 at 1900+, the answer to that is Yes, I guess. Anyone more qualified than me to confirm this scenario playing out?

Sun, Jul 10, 2016 - 11:25am
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If gold is in a B, and if the

If gold is in a B, and if the B goes into new high ground (which is possible in EW) the in that case the C will be sharp and deep.

I have not heard any EW counter consider the possibility of an X wave. But it also can fit.

I favour the possibility we are at 4 of a of B, or entering b of B. I am wary of the possibility for a retracement to VAP support minor hardest at 1240, major hardest at 1280.

I'm not wedded to that count. it's just there on my radar as a possibility no more. There are other counts. B waves are unpredictable and also hard to scale. We could be ending B.

Support and resistance are more important to me. Gold is presently sitting exactly upon an inflection which if it gets above, then the support right here c. 1365 begins to operate. But if gold slips just a little then below 136x that becomes temporary ceiling and we look to test 1240 next.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Sun, Jul 10, 2016 - 9:22pm
Wy So Lo
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Silver and gold behaving very

Differently There are some weird factors involved here.

Mon, Jul 11, 2016 - 1:35pm (Reply to #9159)
Solsson
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argentus maximus wrote: the C

argentus maximus wrote:

 the C will be sharp and deep.

So this is the intermediate future for S&P500, irresponsible printing comes with severe consequences, they want to pump this sky high before a -29 moment? Spx at 2140+ ...

Tue, Jul 12, 2016 - 2:20am
ivars
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During GD in thirties,

Interest rates were low ( followed by 3 month T-bill yield) , practically 0, bank reserves were high (200% over required) , But inflation remained negative. In 1937 reserves were removed and interest rate increased in fear from inflation. Inflation immediately followed, however, since there were no excess reserves nor interest rate on them, FED dropped rate and had another period of 0 interest rates and low to negative inflation. The only thing they did not try was to increase interest rates while excess reserves were still high, and paying interest rate on excess reserves.

War and fiscal stimulus due to that (via debt) solved the problem. Inflation went up. 

Quote:
casual evidence suggests that QE has been ineffective in increasing inflation. For example, in spite of massive central bank asset purchases in the U.S., the Fed is currently falling short of its 2% inflation target. Further, Switzerland and Japan, which have balance sheets that are much larger than that of the U.S., relative to GDP, have been experiencing very low inflation or deflation.
Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation. P.A.M.Dirac
Tue, Jul 12, 2016 - 3:55am
foscotanner
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@ Wy So Lo

I believe that Argentus identified a spell in the middle of July or mid to late when there would be a lot of action from the elites against the ordinary people. Linked to the GV.

This has also been picked up by the web bot.

There is a pretty simple dynamic at play.

Something significant is about to happen. Either some severe printing or a major bank goes to the wall and civil unrest to kick in since Italians are not the same as the population of Cyprus. Likewise once they try something in Italy, then you can bet your life that Spain, France and Germany will take note. They know Italy isnt Cyprus.

So there is a chance that the price of metals could seriously spike. Silver takes 20,5 and there are plenty of shorts to cover. This is the view the web bot is picking up.

When it comes to Silver, the webbot has done a similar job to Bo Polny. It has picked some very big moves but always calls for them to be up. Often they have been down. The web bot has been calling for a summer spike, a wonderful summer for each of the last few summers.

There is a school of thought that says if the webbot is picking up a market trend, then thats the side with the mass of the people on it.

There is also another school of thought that says you have 1 old bloke who is pro silver, pro bit coin and anti government interpreting the data.

Here is my take away. All of the miners I look at are showing signs of wanting to go higher.

Something is different. The only lasting question is whether the bull has returned, the consolidation is over or whether this is the final sucking in of the longs to get roasted before we move higher :-)

Tue, Jul 12, 2016 - 8:50am
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Thanks Foscotanner

On the last GV gold rose and touched it's long term downtrend. It stopped rising.

Now 12th is a much smaller following GV, more characteristic of central banking actions, and now the SPX has pierced old highs, in a preliminary way. Other wider indices are lagging and not at old highs yet. They will be motivated to follow SPX, by observation rather than fundamental status. Follow the leader. Did you ever read something along that principle, and it's avoidance as an automatic triggered behaviour, in this forum in the past?

The next RNP webinar will be held sometime about the last week of July. A past reference to timing of webinars will show that while they take place every 2-3 months, their timing is carefully chosen to be not random and not regular spaced apart and instead tends to be (intentionally) proximate to market events of significance or balance.

Foscotanner's comment about the web bot is really good - who is web bot listening to and how good are they, for the various items it detects? Do market makers post on open access web forums? not so much. But there are good and bad sources out there for the web bot to listen to. However I can't say for sure who it is noticing at any given time, while I do have very clear personal thoughts on this matter. Really what the web bot is, is a conversation data collection device that says "I overheard these guys talking, whose names I can not tell you, but this is what they said ...." Not for me! Though as I mentioned already I have paid a lot of attention to key words and phrases used by the web bot, and other sources out there known to talk in a similar style or content prior to that web bot announcement.

Do your own research if you need to know these things more. Past webinars and RNP videos have discussed these matters - as some helpful people who post thoughts here know. I am of course not the only good source of material in Setup, though I started it, several generous people of ability post here. Their ideas are worth plenty of thought.

Returning to SPX and stocks. Recent turns have been fragmented, not like the 2009 low. So it's a reasonable hypothesis that new turns may be comprised of several smaller turns which assemble into the bigger inflection or technical pattern. A hypothesis to mull over.

So if the stock leaders are going into new highs, will the sheep follow the shepherd, or not? A judgment call into gullibility and money printing feedback loops. There are also confidence feedback loops that complement these, but have a tendency to unexpectedly reverse at certain times. I don't mind being a sheep for a period, I just don't want to get sheared by a surprise clipping!

What level is retail leverage in brokerage accounts running at right now? In retail loans. Are retail accounts stuffed with debt instruments priced by interest rates yet?

Who controls margin percentages, and interest rates?

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Jul 12, 2016 - 8:58am (Reply to #9161)
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I'm looking at that in gold,

I'm looking at that in gold, where the b wave of B could be a "flat", and on a surprising long timeframe. Two years plus.

But above all, I never over analyze corrective waves using elliott. What I want to know is merely: is it corrective or impulsive and what does that mean? EW is sort of lower value during B waves! Though triangles and triple threes reduce the random alternatives for what follows them - which requires a working knowledge of EW to observe of course.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Jul 12, 2016 - 11:39am (Reply to #9157)
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Not sure if this might be

Not sure if this might be part of the puzzle but I found it interesting. Surprising how strong the correlation is.

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Tue, Jul 12, 2016 - 12:30pm (Reply to #9166)
ivars
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This is really interesting.

This is really interesting. But it only appears on one site..have to check if its true.

https://inflation.us/ecb-secretly-buying-gold-with-euros-it-prints/

It would mean we have to look at gold in various currencies, to find the weakest or intermediate one which helps to explain gold prices in others. 

Edit: I checked, it is really true! Amazing. Will try to produce own chart then think what it may mean.

https://fred.stlouisfed.org/series/ECBASSETS

Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation. P.A.M.Dirac
Tue, Jul 12, 2016 - 12:33pm
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My +1 for Silver_Surfer's

My +1 for Silver_Surfer's post above :

This article from Hubert Moolman:

Silver Price Analysis: Repeat Of 70s Pattern Shows That A $675 Silver Price Is Realistic

If I wasn't bullish alternative assets I wouldn't be in this game. But for it to be so soon as he posits .... hmmmmm ... I suppose anything is possible. I do allow for an extra medium term bounce between now and instability. So I'm happy to be a patient accumulator taking all opportunities.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Jul 12, 2016 - 12:56pm
ivars
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It is true and incredible

It is true and incredible correlation ( I had to add 100 EUR to prices to get perfect overlay). It is telling us something, and it started since 1999 when Europeans signed agreement not to sell gold. 

One thing it tells for sure - gold in EUR has to go up if ECB will continue to increase its assets with QE programs, which it most likely will. One reason could be serious devaluation of EUR vs. USD. Another reason- Europeans CBs buying/selling gold to keep gold share at the same level relative to the expanding assets of ECB in EUR. 

Quote:
Under the agreement, the European Central Bank (ECB), the 11 national central banks of nations then participating in the new European currency, plus those of Sweden, Switzerland and the United Kingdom, agreed that gold should remain an important element of global monetary reserves and to limit their sales to no more than 400 tonnes (12.9 million oz) annually over the five years September 1999 to September 2004, being 2,000 tonnes (64.5 million oz) in all."[2]

Britain did not sign, USA as well. it was prolonged with slightly different texts in 2004, 2009 ..in 2009 IMF did not sign anymore. It was prolonged again for 5 years valid from September 27 2014..

Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation. P.A.M.Dirac
Tue, Jul 12, 2016 - 12:58pm (Reply to #9169)
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That's really interesting

Thanks for posting that, Ivars, and it's nice to see you hanging around here again. Keep up the good work.

Tue, Jul 12, 2016 - 2:22pm (Reply to #9169)
ivars
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ECB keeps 6800t of gold to cover all expansions of balance sheet

ivars wrote:

 Another reason- Europeans CBs keep gold share at the same level relative to the expanding assets of ECB in EUR. 

And this correlation means that European CBs keep the amount of gold reserves that takes care of ECB balance expansion at approximately 2 000 000 000 000 EUR/900 EUR/Oz= 2222 million Oz=2,2 billion Oz = 6800 tons.

To keep this correlation working, the member CBs and ECB has to be able to impact gold prices a lot. Seems lately they have not been so successful in bidding prices UP.

Somehow they like to have it tied to gold. Sounds like kind of freegold standard?

Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation. P.A.M.Dirac

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