The setup for the big trade

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Fri, Aug 7, 2015 - 4:14pm
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The battle between $1084 and $1100- who will win?

Two long weeks fighting it out in the trenches in a tight little 16$ range. Bears haven't cracked 1084. Bulls cannot find traction to get above 1100.

I suspect our thread host would wisely answer "Wait and see who wins" but I am curious which way Setup readers think this is going to break from m here. Are we consolidating a bottom here? Are the Bears just sucking up liquidity before pushing lower?

If you have the time, feel free to chime in with your opinion- which way do you think this resolves? Anyone feel strongly enough to throw some money down?

Fri, Aug 7, 2015 - 4:16pm
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whoops

Dupe

Fri, Aug 7, 2015 - 5:27pm
Byzantium
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@ Pining

In my view, and notwithstanding the influence of cycles, whether shemita or otherwise....

attacks will keep coming according to market timelines, till an attack will be seen by TPTB as finally attracting the wrong market behaviours.

The wrong behaviours are

  1. too much buying of phys on the LBMA or wherever it matters, by customers who matter, and
  2. weak hands cease to cough up metal; there are no more leaves seemingly to shake out.

I don't know about silver, because I calculate that the stock to flow is at least a third poorer for silver than gold, which means fewer leaves on the tree for the bears to shake. But sub-$1000 gold has to be a fabulously juicy target for the bears. It may help them convince many gold holders that we are still a long way from a bottom, and that we might even retrace the entire bull.

But, I refer again back to where I started; Bo Polny and other cycle theorists, say do not look at price but at time, and that the bears are (allegedly) running out of time.

I think we will see a concerted attempt to break $1,000, so soon I guess. Note that I say 'attempt.' They need to have enough phys to hand to satisfy the players that matter (China?) in case it triggers a buying spree. But, the cartel has amazed us in the past with its audacity and success. It is a cat'n'mouse game; China and Russia want to see how low the stupid gold cartel will go, in selling them metal. If they think they will get some at $500, they will wait for it. Meanwhile, 2008 showed us that extended retail shortages, are of no consequence at all.

I will largely sit this one out; but I did divest a quarter of my swing portion, and expect to see sub $1000. I hope I am wrong, because if we break $1000, it might become formidable resistance again.

Sat, Aug 8, 2015 - 2:32am
Solsson
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#Pining Interesting topic, I

#Pining

Interesting topic, I just sent another pm-analyst an email regarding this subject and he has jumped in and out of JNUG several times this week, I am staying put. 12000 contracts dumped on gold 3min before the release from Fed/Fomc and gold recovered immediately, that is strength.

I say the low (for now) is in and a 2-3 months rally will start soon. The thing that bothers me is the EW count for this sharp correction doesn't fit for a longer term rally, we do not have a top in wave 4 and the final wave 5 is missing. Ok so the rally stops at 1120-1140 that would be a perfect top for wave 4 and then down we go to 1033.

Or skip EW count and up we go to 1180-1200 in 2-3months and then down again to a final? low.

I am very transparent with my trades and the trades are the truth and nothing but the truth, so yes lets see how it unfolds coming weeks. 20% bear stock 40% bull pm and 40% cash, for the next 2-3months.

Many positive comments on Bonds from various analysts out there ...

Sat, Aug 8, 2015 - 7:34am (Reply to #7995)
eclectic
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Pining/Solsson

Good commentary.

Sat, Aug 8, 2015 - 7:22pm (Reply to #7994)
zman
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Byzantium wrote: In my view,

Byzantium wrote:

In my view, and notwithstanding the influence of cycles, whether shemita or otherwise....

attacks will keep coming according to market timelines, till an attack will be seen by TPTB as finally attracting the wrong market behaviours.

The wrong behaviours are

  1. too much buying of phys on the LBMA or wherever it matters, by customers who matter, and
  2. weak hands cease to cough up metal; there are no more leaves seemingly to shake out.

I don't know about silver, because I calculate that the stock to flow is at least a third poorer for silver than gold, which means fewer leaves on the tree for the bears to shake. But sub-$1000 gold has to be a fabulously juicy target for the bears. It may help them convince many gold holders that we are still a long way from a bottom, and that we might even retrace the entire bull.

But, I refer again back to where I started; Bo Polny and other cycle theorists, say do not look at price but at time, and that the bears are (allegedly) running out of time.

I think we will see a concerted attempt to break $1,000, so soon I guess. Note that I say 'attempt.' They need to have enough phys to hand to satisfy the players that matter (China?) in case it triggers a buying spree. But, the cartel has amazed us in the past with its audacity and success. It is a cat'n'mouse game; China and Russia want to see how low the stupid gold cartel will go, in selling them metal. If they think they will get some at $500, they will wait for it. Meanwhile, 2008 showed us that extended retail shortages, are of no consequence at all.

I will largely sit this one out; but I did divest a quarter of my swing portion, and expect to see sub $1000. I hope I am wrong, because if we break $1000, it might become formidable resistance again.

"Meanwhile, 2008 showed us that extended retail shortages"

Are suggesting that retail investors couldn't buy all the gold and silver they wanted during the 2008 lows? That's nonsense.

Sat, Aug 8, 2015 - 8:35pm (Reply to #7997)
fahrenheit451
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Gold in 08

No Nick, it's not nonsense.

I myself had an almost three month delay from APMEX, Kitco had even longer delays. You can make your point without making shit up.

Sat, Aug 8, 2015 - 10:53pm (Reply to #7998)
zman
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fahrenheit451 wrote: No Nick,

fahrenheit451 wrote:

No Nick, it's not nonsense.

I myself had an almost three month delay from APMEX, Kitco had even longer delays. You can make your point without making shit up.

Yes, delays on particular products, that's NOT a shortage of metal. LOL!!! I was looking at APMEX everyday during that period, I know what was available. Just because I can't find at 2003 Honda accord (for a short period of time) doesn't mean there's a shortage of cars.

Sat, Aug 8, 2015 - 11:28pm
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I would not presume

I would not presence To speak for Byzantium, but I interpreted that sentence as simply stating that during 2008, retail shortages (as measured by wait times, increasing premium etc) did occur but were not sufficient in and of themselves to move price meaningfully so "they are of no consequence" in his opinion for determining future trading strategy from them alone. He never stated metal was totally unavailable, just in tighter supply. I struggle to understand what you might find objectionable about that, zman? It seems a Far leap to "nonsensical," must say.

Sat, Aug 8, 2015 - 11:32pm (Reply to #8000)
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sorry dupe

My apologies, computer keeps spitting out dupes on me... Maybe it's been drinkin'

Sun, Aug 9, 2015 - 2:10am
Byzantium
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Retail shortages

@Zman,

  1. The retail market is bigger than just the USA. Here in the UK for example, the only suppliers that I could find for gold as a newbie in Jan 2009, were out of stock and not taking orders. Why wasn't tightness in the UK market or anywhere else for that matter, arbitraged by the market?
  2. I remember reading at the same time, that US customers were struggling to find silver coins at the 'billboard' spot price, or at anything close to spot price. In fact, the low spot price is what ignited a wave of retail demand. I guess the USA is a big place, and not all had the same experience. But I have seen that same debate rage on ZH and elsewhere, of some lamenting that there was no product to be had, and others saying 'nonsense, go to this website,' and then others in turn responding back to 'GTFO, it's on the website but just try actually getting any out of them.' I am not God, I don't know what the truth was, but it was a very hot topic at the time. And in both the USA and UK, the mainstream media showed pictures of people queuing at Retail outlets, just to get on some kind of waiting list.

I'm sure that I didn't imagine these stories, and that others will recall the same or similar. Many have since suggested that it is an error to assume that retail demand has any short to medium term effect on price anyway. There is a wholesale and bulk market too, and that is where price unsurprisingly appears to be determined. I stand by my observation that retail availability does not determine price, as evidenced by the fact that there was no upward effect on spot price regardless widespread reporting of shortages during the end of 08 and the beginning of 09, both in the mainstream media and anecdotally in the blogosphere.

Sun, Aug 9, 2015 - 12:18pm
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Monthly Gold Cycles

This might have made a full blog article but I thought it might be better to just keep it short and simple and simply present the cycle data to Setup readers, and likewise in the AM blog for Main Street TFMR readers. The table is the meat and the chart the conversation piece.

I enclose below a list of the monthly gold cycles found in gold prices from 1924 to the present.

There's plenty of material there for Setup readers who are willing to compare probability scores with the cycles being talked most widely about. You might get a surprise or two if you look hard enough.

For those who consider September 2015 is a vital time for various reasons: I plotted two 60+ month cycles in combined form and these two appear to make a turn about that time, but I caution against a simplistic interpretation because the other cycles have not gone away.

Better to look at how those interacted at their last turns and see what they accounted for and failed to account for back then, add a load of doubt about today's markets being "different" possibly too if you think that may be the case.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Sun, Aug 9, 2015 - 8:37pm (Reply to #8002)
zman
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Byzantium wrote: @Zman,  The

Byzantium wrote:

@Zman,

  1. The retail market is bigger than just the USA. Here in the UK for example, the only suppliers that I could find for gold as a newbie in Jan 2009, were out of stock and not taking orders. Why wasn't tightness in the UK market or anywhere else for that matter, arbitraged by the market?
  2. I remember reading at the same time, that US customers were struggling to find silver coins at the 'billboard' spot price, or at anything close to spot price. In fact, the low spot price is what ignited a wave of retail demand. I guess the USA is a big place, and not all had the same experience. But I have seen that same debate rage on ZH and elsewhere, of some lamenting that there was no product to be had, and others saying 'nonsense, go to this website,' and then others in turn responding back to 'GTFO, it's on the website but just try actually getting any out of them.' I am not God, I don't know what the truth was, but it was a very hot topic at the time. And in both the USA and UK, the mainstream media showed pictures of people queuing at Retail outlets, just to get on some kind of waiting list.

I'm sure that I didn't imagine these stories, and that others will recall the same or similar. Many have since suggested that it is an error to assume that retail demand has any short to medium term effect on price anyway. There is a wholesale and bulk market too, and that is where price unsurprisingly appears to be determined. I stand by my observation that retail availability does not determine price, as evidenced by the fact that there was no upward effect on spot price regardless widespread reporting of shortages during the end of 08 and the beginning of 09, both in the mainstream media and anecdotally in the blogosphere.

"retail availability does not determine price, as evidenced by the fact that there was no upward effect on spot price regardless widespread reporting of shortages during the end of 08"

It's really a logistical issue more than anything else, that type of "shortage" doesn't warrant "upward effect of spot price" as the market determines is makes no difference. I seems we are in agreement for maybe different reasons

Sun, Aug 9, 2015 - 10:01pm (Reply to #8004)
SilverRunNW
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You should only be posting

You should only be posting where your intellectual prowess is height and age appropriate.

Please try here: https://spongebobkids.blogspot.com/

Mon, Aug 10, 2015 - 8:32am (Reply to #8005)
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Not sure what you think is

Not sure what you think is stupid about zman's post SilverRun, he is making perfect sense to me. There were no poppy seed loaves left in the bakers yesterday - is there a wheat shortage?

"Many have since suggested that it is an error to assume that retail demand has any short to medium term effect on price anyway."

Yes, and it is also an error to suggest that the non-availibility of a particular (retail favoured) coin or whatever tells us anything - anything at all - about the supply/demand of gold at a particular price. The meaningless word "tightness" is making this hard to discuss.

Do you want to tell me there was "physical tightness" meaning that people wanted gold and couldn't get it, and NOT because the inventory of that particular coin had run down but because no'one was selling because they feared imminent collapse of the market? Where was the movement in price to confirm this (in reality it would be before)? Until the price moves as well, there is no shortage of gold, there are just supply chain/logistical issues that exist in every single market and industry.

Mon, Aug 10, 2015 - 10:29am (Reply to #8006)
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Breakout or fake out

1500Ag and 1100Au broken, for how long, looks nice :D

Mon, Aug 10, 2015 - 12:23pm
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Short Term Bear Pennant failure break

argentus maximus wrote:
August 3, 2015 - 2:10pm #7959

August inflections

I've found peaks on today (a holiday in UK/Ireland)

Wednesday in 2 days from now the 5th August

there has to be one in the week beginning 10th August but I haven't identified it yet so I think I'll go for Monday the 10th for that unless I get better signals for a different date

and Friday 21st/Monday 24th August

and again Monday 31st August ...

So the short term bear pennant looks like it's been broken. The higher pivot above is still unchallenged, so it's just short term bears getting a kicking so far. But the break of the pattern did occur on one of the inflection dates outlined a week ago, so it has a firm root and could grow into something.

In the chart the thin vertical lines are the 90+ trading day cycle which is not such a precise thing, but the last few turns are marked. The 5th Aug inflection preceded the daily bar upon which (6th Aug) price closed above the descending red downtrend. So medium term stops might be about 5th and 6th highs and closes, with short term stops tracking up rather faster than that.

I'm watching, waiting, long for longer term, out for short term, stocks and bonds fully hedged, and wondering what mid-August inflection will bring next. If gold continues running up between now and that inflection, it could be a very nice short covering rally that locates medium term range highs on the chart. For now those offer selling to come in at the recent cascade points circa 1131 depending on contract, my above chart is the Comex continuation contract.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Aug 11, 2015 - 7:51am
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So much talk about the

So much talk about the scarcity or not of precious metals.

When we hear stories about solar panels doubling in price then silver will be really scarce.

But what about the money of the people? In the west the money of the people was most recently cash, now it's passed into credit/digital cash transfer almost completed already, and like other past Bretton Woods type periods the monetary bigwigs are beginning hostile moves against the older money of the people - the cash I mean.

So will foreign dollars (and possibly also every other debt ridden country's fiat notes) in cash become scarce before or after eg silver becomes scarce? Much depends on how switched on "the people" really are. We didn't have an internet the last time this scam was pulled in 1944-7 and 1968-71, so in a certain way this time really is different.

So put yourself in the head of a CB chief, Larry Summers, or other suitable nice person and ask one question: How can I screw the most out the many with the least retaliation?

You see that's what they're thinking about as the money runs out, and it is running out right now.

It seems to me cash will be removed, digital cash will be controlled for which read taxation, and digital credit will be marketed. They will try to contain and force money of the next phase to operate within a totally sealed system. To picture what I have in mind look at how LBMA gold operates right now, accounted for with receipts moved from one vault account to another but never leaving the vault, and you never get to see or touch your money but only get to direct it's next move within their system storage vault. This leaves Asia, where the gold seems to be "among the people". I would prefer if more of it was among the Central Banks of Asia. That would reassure me more seeing as "the people" don't exactly have the best record for coming out on top.

These would seem to be a few of the things which will have to be sorted out during the coming business cycle. The IMF and World Bank allowed the west to spin (leverage) their currencies up into greater amounts which they could then access and use. The Asian Development institutions recently created begin to operate early next year and will Easternise this process. I need to see how much power the resource producing nations will have within the new supranational banking institutions to see how this new power will be distributed. Will the resource producers get shafted again or not? What will be the purchasing power of their assets in the future? Will China support producers equitably or do as the West did with them for the last 200 years? The Russo-Sino alliance appears to be a good start but if you think about it in this vein, that would be a step away from 20th century consumerism towards what future exactly it's hard to tell.

Not all musings lead to clear answers but it's still good to ponder over them to widen personal horizons and benefit from that at least.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Aug 11, 2015 - 11:08am
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10th August Inflection

I suspect the best chart of the events of 10th August inflection might be China devaluing the Yuan precisely on the day. Three years trading of $Renminbi has now been erased:

I've not looked at bond charts yet, but that sovereign yield pullback must be looking pretty accomplished by now.

Setup readers and RNP-ers are well aware that I've been awaiting the events of August for a long while now with great interest. Please note also that though I specifically mentioned 10th August at the start of the month (see quote in a couple of posts above this one), I have been of the opinion that the third week of the month will be the best/worst.

If that is to be so, how can Mr Market trump yesterday's devaluation by China? I don't know. But if the next inflection is indeed carrying a larger financial impact and I'm right about that too, then get ready for a potentially even bigger surprise.

Gold in US dollars is up a meager 0.1% at the moment, and down 0.2% against Euro.

In Yuan gold is pushing in and out of the short term consolidation at the moment.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Aug 11, 2015 - 2:38pm
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The Bonfire of the Currencies ...

... continues as the 'Golden Age of the Central Banks' slowly grinds its way into the history books.

Interestingly, the Plaza Accord was 30 yrs ago this Fall eventually contributing to USDollar weakness in 1987 ...

The 'big trade' in the PM's continues to grow more appealing as an inevitable shift in sentiment emerges, however patience the key from my perspective ... thx AM for your continued insight.