The setup for the big trade

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Fri, Oct 18, 2013 - 8:35am
Yug
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AM - low searching work UPDATE please

Hi Argentus,

You've talked about a low this week that could lead to something else next week. Could you update if you can?

Compliments, your chart#3574 is really a superior forecasting chart.

Good idea to label it, risk to find it somewhere in the web...

Thanks

read u later

Fri, Oct 18, 2013 - 8:43am It's a mystery
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miners

If ever there was a topic to get the conpiracy ideas flowing it is the miners.

I did see a very good suggestion that ETF's were the cause since prior to ETF's you either held Gold or you held gold mining shares.

Now you can hold Gold or you can hold a Gold ETF. Therefore the Gold ETF becomes a choice before holding the miners.

This struck me as being the effect rather than the cause. It might be the desired effect, but it is an effect nonetheless.

As an open minded gold bug.....

I have to consider the possibility that Gold shares had reached bubble proportions. Maybe not from a valuation view point against the price of gold in $ but certainly from the view point that there were many junior gold companies having money thrown at them to dig up any old sandpit, mud patch or bit of barren land in search of gold.

When you have times such as those - you have to consider there was a boom and as followers of this board know too well, cycles cannot be beaten and after a boom comes........

During a couple of conversations over the past month or two with a director of a mining stock his words to me were:

On some claims they bought in 2012:

- We took this group of claims because if we didnt, someone else did and there are heaps of claims / properties that are offered around that are garbage.

On a property that they dropped in past quarter (note - was property where drilling indicated low grade near surface gold easily recoverd at around 1 to 2 grams per tonne. (would have been a surface mine)

- We have dropped this property because we do not want to burn any more cash on it when it needs so much more work done on it. We think we can get something far more advanced / more bullion with the money.

And now - on to the conversations they are having today on sites....

- We are getting lots of calls about properties since we have cash and people know we will move for the right thing. There have been suggestions about partnering with someone with proven property and plan, but we do not have a great track record whenever we have acted in joint ventures. So we are not keen. We are being offered some very interesting things, but they are being over valued. I keep telling people that I am interested, but come back when the price is more favourable.

This says to me that we have had a boom and are now in somewhat of a bust......

The one i am undecided on is:

- We do not want to wait too long to get something, because this market could turn and move very quickly.

Is this what Armstrong means when he says 'the bulls need to be crushed' or is this an indication that old timers know how depressed this market is and where a turn is likely to happen.

Note - the head of the company has been in mining industry whole life and is in 70's. The company is very junior but has been around for longer than this bull market in gold!

Fri, Oct 18, 2013 - 10:47am greatwarden
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@greatwarden

Thank You. I will try to smooth the curves with different MA to see - if I see anything, but the most used MA will tend to modulate the oscillations of price over longer term. Maybe.

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
Fri, Oct 18, 2013 - 10:49am
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Flag formation on the HUI,

Flag formation on the HUI, gold and silver. HUI is already resolved to the downside. Be careful for a possible waterfall here.

Fri, Oct 18, 2013 - 11:30am
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The big picture should not be

The big picture should not be forgotten

As I see it, one way into Q4 2013 and 2014 works out like this:

Of course this is merely one person's view of what might be .....

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Oct 18, 2013 - 11:33am
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The big picture should not be

Duplicate deleted

AM

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Oct 18, 2013 - 12:44pm
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Sorry for the graphics, but

Sorry for the graphics, but the HUI looks like its ready to cough up blood.

Fri, Oct 18, 2013 - 1:58pm
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I remade USG debt crash (

I remade USG debt crash ( reduction by unconventional means) approximation using latest data and narrowing region starting with 1997, and using USG debt-debt held by FED to cancel out influence of QE on debt levels, leaving mostly fiscal policy (USG spending) created debt. It has better shape, with clear inflection points. We can see that right now it is in decline, but it will move up again very soon ( blue line).

Results are interesting- but - not my fault but may be- return to debt crash date further away then I thought in between my initial predictions (here:https://www.tfmetalsreport.com/comment/521025#comment-521025) and this one- and, it fits the Armstrong 2015, 75 date..- but that's mathematics, it may vary from Armstrong date 1 quarter to each side, but in general it seems to be there:

The fit is VERY good for this type of approximation, especially over last 6 years since the burst of Mortgage bubble.

What are conclusions:

1) Debt ( caused by fiscal actions) will start to accelerate even more rapidly latest in q1 2014. That should mean reversal in PMs out of current bear phase. January 2014 anyone?

2) Politically it means that :

- GOP has lost austerity battle with this lost battle during shutdown, and will NOT recover

-So GOP will continue to cave in in next debt ceiling /budget talks as it can not gain anything

-spending option ( based on fear of collapsing economy ) will win vs. austerity and continue to undermine fiscal basis of the USA and Western world, but meanwhile continue to redistribute more to the top 1 %.

-Most likely, GOP will lose House majority in 2014

3) FED QE will really continue at least all 2014, so stocks will continue to grow due to push by beneficiaries of QE (banks) and continued low returns on bonds. By end of 2015, FED will hold 3-4 trillion of USG debt and total public debt will be around 21-22 trillion.

4) If - and I suppose yes - because GOP has lost austerity battle- Democrats win House in 2014, an unconventional solution to debt question will be found in Q3 2015-April 2016-sharp reduction of debt-may cause PM crash depending on HOW this is achieved.

Before that, unconventional methods will not be used, but will be discussed more and more openly and in detail;

5) Debt reduction method positive for PMs would be cancelation of debt by FED and other ways leading to further reduction of trust into US treasuries as collateral ; Or government taking over USD issuance without debt, or similar USD devaluating actions

6) Debt reduction method negative for PMs would be e.g. one time wealth tax (10%) used to pay of debt partly or similar redistribution of wealth to reduce indebtness of state and may be households and corporations; At least initially if performed fast..somehow.

So it seems that big trade is closer than I thought- January 2014.. The real big one may come after q3 2015, or not. It will be different.

Nothing new , really. I am moving in circles...

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
Fri, Oct 18, 2013 - 4:46pm
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A poor close for Friday. 

A poor close for Friday. Doesn't look good for next week imo. But the good news is if we go down we have a much better chance of a rally into November. :) But we'll have to see.

Fri, Oct 18, 2013 - 9:11pm
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above post

Should clarify....doesn't look good for Monday. As we all know prices fluctuate continuously throughout the week, often breaking what appears initially to be a weekly trend, during mid-week.

Sat, Oct 19, 2013 - 11:37am
What If
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HUI

How do I get a hui chart on my android phone?

Sat, Oct 19, 2013 - 2:34pm
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HUI chart link

Sun, Oct 20, 2013 - 6:06am
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http://www.usdebtclock.org/

Sun, Oct 20, 2013 - 8:14am
ivars
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This was correlation I found

This was correlation I found in March 2013:

And this is how it looks today:

Being bullish on PMs and doom scenarios, reading ZH and TM did not allow me to trade this one direction street...

However, there seems to be some more potential for S&P to the upside- provided QE does not end in 2014 ( it should not given the need for USG to borrow cheaply that will move up after GOP defeat on austerity ).

Also , from the charts its possible to see how easily markets dismissed the second debt ceiling standoff compared to one in summer 2011. This time, there was no dent in the stock upturn drive.

Obviously, markets were right, as the result of negotiations was nothing, no spending cuts. It seems that coming debt ceiling negotiations in January 2014 will just drive stocks into stratosphere as excess reserves available for speculation continue to swell.

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, Oct 20, 2013 - 1:11pm
ivars
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This gold fork seems to be

This gold fork seems to be still working :

The last figure looks like inverse head and shoulders near completion.

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
Mon, Oct 21, 2013 - 1:02am
T
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I agree Ivars

that simple pitchfork looks like a good marker.

But I would also draw a parallel line that flows from that august 2013 top, the latest top.

That parallel line would show resistance around 1350-1370, the same right shoulder zone that preceeded the latest fall to 1250

Mon, Oct 21, 2013 - 7:33am
ivars
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IAMWaiting for your comments

IAM

Waiting for your comments on USD JPY..As I understand, if JPY drops low enough, buying USD denominated assets will be too expensive , while selling them might get interesting?

What kind of USD denominated assets are JPY owners holding or looking to invest? Are they also pension funds? I have heard carry trade mentioned many times, which i understand ( correct me) is one borrows JPY ( in JAPAN or anywhere??) , buys UST, gets some return better than 0 what is possible buying Japanese bonds, sells UST, puts the profit in his balance sheet in JPY. Virtually risk free - if USD JPY rate stays constant.

If USD JPY rate goes to the sky breaking out of triangle, its better to wait before selling the currently owned USD assets while going into new assets may carry too much risk. Would that mean then that devaluation of YEN is bad for carry trade?

Just trying to add one more trading jargon word to things I may understand.

My personal feeling is ( perhaps biased as usual) that USD will move up now as barriers to its fast collapse have been removed (Default risks removed for ever, QE continued as per new FED Chairwoman), while longer collapse - who cares about that?

So, to confirm my bias I drew a fork. Though have I not been biased, I would be looking for double bottom at 74... But the value 80 is actually 270 weeks moving average (5, 15 years) , that is average since the beginning of crisis in sept 2008. Also 325 weeks MA , and 200 week MA. So far this average means that relative to other currencies, USD has not lost anything due to crisis and QE ( everyone did QE, did they not?).

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
Mon, Oct 21, 2013 - 8:11am
ivars
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Modified Shiff looks like the

Modified Shiff looks like the most reasonable fork- here , in case USD moves up, oil shall fall a bit more- 97,5 (? )but in general it will gain in price very soon again:

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
Mon, Oct 21, 2013 - 8:12am
It's a mystery
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IVARS

https://fofoa.blogspot.com/2013/10/gold-as-forex-currency.html?showComme...

FOFOA is very long winded but he "all of a sudden" ran a piece on gold as FX? Interesting. Because that was the point of this piece.

https://news.goldseek.com/GoldSeek/1381417452.php

$/Yen is the primary driver for asset classes. However, in the last few sessions, SPX has diverged. So, if the $ falls out of the triangle and the YEN rallies, well the Nikkei gets crushed and gold will rally. I have to assume US equities will follow the Nikkei but the divergence is notable.

Mon, Oct 21, 2013 - 8:17am
ivars
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Looks like USD JPY does not

Looks like USD JPY does not really want to move down..hitting the top of the fork stubbornly n times:

If only this is not head and shoulders sloped...

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
randomness