The setup for the big trade

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Fri, May 12, 2017 - 4:56am
Byzantium
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@ Argentus

or put another way, as attributed to Jesse Livermore, 'Be right & sit tight.'

Tempered though with the adage 'The market can stay irrational for longer than you can remain solvent.'

Wisdoms do conflict with each other, and best to see both sides, to keep us on our toes. Which of course, does make the waiting difficult, because the need to adapt, conflicts with the concept of waiting. What to do, what to do.....

Sat, May 13, 2017 - 11:57pm
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Ronnie Fattal's 5/13/17 gold and silver analysis

Ronnie says...More pain for gold and silver ahead. We just may see better stacking prices soon. It is apparent that Ronnie is looking for the bear market continuing and possibly for new lows coming below the 2015 lows? The stacker in me says that is fine but the mining stock trader in me says Yikes!

Elliott Wave Analysis of GLD, Gold & Silver as of 13th May 2017
Sun, May 14, 2017 - 12:15am
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@silverwood

Ronnie's waves "projections" change more often than you change your underwear. ZZZZZZZZZZZZZZZ.

Mon, May 15, 2017 - 7:47pm
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SLW projections

weekly projections update:

Normally I plot one of the projections in blue to help separate the two, but you get the idea.

There are reasons (artifacts in the algorythm) to be careful about accepting easily that the low at end of year will be so much lower. For example, the two recent highs in silver were level instead of a higher followed by a lower high. The indicates higher harmonics beginning to take dominance from the ones I have been using for the last while. In other words, the downtrend is getting somewhat tired.

I will take guidance on this from the relative strength observed during the next interim high. Or lack of strength, whichever is more visible.

Many people are taking the last few days' fast decline (short term) as a buying point. But I am cautious. If we see a trading range develop instead of a rally with no return to recent interim low levels, then I would look for an initial false break up to fail and then an actual break down to a new lower interim low which would be more likely to achieve long term status as a senior low.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Wed, May 17, 2017 - 10:04am
Solsson
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Gold is on fire today are we

Gold is on fire today are we close to a BP breakout here or ?

Jim Rickards recommended K92 to his subscribers of the MIDAS-letter a couple of days ago when K92 was trading at 72c. Now we are close to $1. A little bit of friendly corruption here, production update and new drills results released today. The timing is a little bit too good to be true? From a poster at Stockhouse:

Look at the biceps on those intercepts ... is that sexy or what.

  • 1m at 6.01 g/t AuEq plus 1m at 4.33 g/t AuEq in hole GCDD0038
  • 2m at 29.6 g/t AuEq, including 0.6m at 130.94 g/t AuEq in hole GCDD0045
  • 4m at 174.78 g/t AuEq, including 1m at 244.09 g/t AuEq, plus 3.2m at 6.88 g/t AuEq in hole GCDD0046
  • 75m at 21.38 g/t AuEq, including 1.05m at 51.22 g/t AuEq in hole GCDC0052
  • 3m at 27.93 g/t AuEq in hole GCDD0053
  • 3m at 22.22 g/t AuEq, plus 1.6m at 4.13 g/t AuEq in hole GCDD0059
Thu, May 18, 2017 - 4:54pm
silverwood
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Silver's long term view

Any of you Elliott Wave experts care to comment on Ron’s long term view of silver’s bull market? Wave 4 was a Running Flat Correction?

https://www.321gold.com/editorials/rosen/rosen051717.pdf

Thu, May 18, 2017 - 5:58pm silverwood
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[quote=silverwood]Any of you

silverwood wrote:
Any of you Elliott Wave experts care to comment on Ron’s long term view of silver’s bull market? Wave 4 was a Running Flat Correction?

https://www.321gold.com/editorials/rosen/rosen051717.pdf

For Ron to be right on silver I'd say Tony Caldaro would have to be right about stocks too. Big wave 3 up stuff.

https://stockcharts.com/public/1269446/tenpp

Scroll down to the weekly timeframe.

I wouldn't bet on it until after cycle triggers are passed by. But a breakout successfully held would count as a vote by Mr Market for that view. In other words if it starts doing that I'll not take long to adjust my faulty views!

I'll be curious to read what the other EW contributors make of it when they make their comments.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Thu, May 18, 2017 - 8:50pm silverwood
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@ Silverwood

My 2-cents. Not an expert but I think it's wishful thinking on Rosen's part. Yes, he is describing a Running Flat correction accurately, but the price of his wave B for Silver is WAY too high above the top where wave A began. Just another random thought here, but since Silver has a lot more uses as an industrial Commodity, it might be that JPM has accumulated their stash to control prices from exploding upward. A good example is a long term chart of copper. It was held in a trading range for many years before it finally moved into a bull market. Yet, no inflation during that time? Ha! If such is the case, they will not be able to easily control the pog, which is viewed as having a greater role in the global monetary system.

Fri, May 19, 2017 - 2:34am eclectic
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@ eclectic

I see your point about the size of the wave B in Wave 4 being proportionally out of whack. Would it fit if silver's wave 5 went to something around $200? I'm not saying this will be the case. Is there an Elliott wave rule that determines the proportional sizes of waves?

In regards to your JPM thought, I often had a similar thought. We know JPM is an agent of the Fed so why would it be unreasonable to think they were giving the job to create an orderly silver market? Future production slow down coupled with increase uses for silver could cause prices to naturally rise. Now factor in the possibility those condition could ignite a stacker's mania. The "tulip bulb" type frenzy that would result from this could cause serious damage to economies world wide. So The Fed has put JPM to prevent this. Just a thought.

Fri, May 19, 2017 - 4:03am silverwood
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@silverwood

SW, I probably know a lot less that others on the board. That $200 price analysis and projection assumes one has the Cycle and SuperCycle degrees correctly identified. So, an error in judgment on the composition of those larger waves magnifyes the margin of error if one gets it wrong: at least as far as timing is concerned. Like those of us who didn't correctly identify that fractal wave move in the pog from 1999-2011.

Another 2-cents. There was a recently article on Sinclair's website that explains the most important property of the metal as it relates to the long term pricing mechanism: the unique and fundamental property as a store of value. This is also directly proportional to paper leverage and for me this was an important insight to remain bullish about price expectations.

Sat, May 20, 2017 - 6:02pm
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Ronnie Fattal's 5/20/17 gold and silver analysis

Elliott Wave Analysis of GLD, Gold & silver as of 20th may 2017

He's a real nowhere Man,
Sitting in his Nowhere Land,
Making all his nowhere plans
for nobody.

Doesn't have a point of view,
Knows not where he's going to,
Isn't he a bit like you and me?
Nowhere Man, please listen,
You don't know what you're missin',
Nowhere Man, the world is at your command.



He's as blind as he can be,
Just sees what he wants to see,
Nowhere Man can you see me at all?

Nowhere Man, don't worry,
Take your time, don't hurry,
Leave it all 'till somebody else
lends you a hand.

Doesn't have a point of view,
Knows not where he's going to,
Isn't he a bit like you and me?

Nowhere man please listen,
you don't know what your missin'
Nowhere Man, the world is at your command

He's a real Nowhere Man,
Sitting in his Nowhere Land,
Making all his nowhere plans
for nobody.
Making all his nowhere plans
for nobody.
Making all his nowhere plans
for nobody.

Sun, May 21, 2017 - 2:55am
Solsson
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Are you loaded up with

Are you loaded up with bitcoins? I am not, I wish I had bought it a couple of years ago, right now it looks like a speculation bubble:

I am pro bitcoin/blockchain-tech and such but near term bitCoin looks overvalued vs. Gold and Silver

Gold backed crypto currency coming:

Video unavailable

A good speech by Stefan Molyneux:

Bitcoin vs. Political Power: The Cryptocurrency Revolution - Stefan Molyneux at TNW Conference
Sun, May 21, 2017 - 3:46pm
Pete
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ES heads up

I have so little time to keep up with this forum these days, and I have little time for any market analysis. I'm holding all my metal, but will sell enough into a PM rise to pay off my mortgage. The days when my interest in trading was all consuming are over. But, from time to time I dip into the charts, and when something of genuine interest shows up I will post if I have the time.

When ES failed to make the ml at pivot e, it was a clear sign of weakness at the top and you had to sell the break of the lower parallel. Yet, it is possible that a pattern may be developing in ES for a top that looks like this one that happened in DX in January:

(see the lower chart) https://www.tfmetalsreport.com/comment/661174#comment-661174

The similarity is the ending expanded pivot pattern that would be created with a new or equal high in ES; it could happen at the Babson R1 line of the (assumed) A wave of a 4th wave correction in progress (a la Trader Joe and Daneric). Note the strength of the 0-4 cl! The R1 may yet be reached is all I'm saying.

This setup could provide for a low risk, high reward entry (short) for an upcoming C wave. Of course, the B wave top could already be in, but a possible expanded pivot formation should not be ignored.

BTW, the 60 year cycle, James Flanagan's favorite, projects from the yearly top in the DJIA in 1957 to 7/12/17. Just a date/time frame to keep in mind.

Best wishes to all.

Mon, May 22, 2017 - 2:00pm
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CME Calendar for Gold and Silver COT etc

Remember the little guys get run out the end of month before, but the big guys can hang on for the final month. The little guys rarely get a good price, so that moment presents as counter trend.

Large specs are often wrong, but not always.

It's my understanding the market makers can roll direct and never have to convert to cash. However, if they are over their limits their end of half year/end of year accounting may document such a situation, so at certain times their power to dodge reporting is more restricted. In this way the "pulse of the comex" applies to it's owners too, as far as that goes.

Options at expiry either expire worthless (90% of them) or convert to a future position and cascade into the future delivery month's open interest.

LBMA does not disclose to retail. They can be used for a little cheque (check) kiting by the biggest guys.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, May 23, 2017 - 1:37pm
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Today's post is in the AM

Today's post is in the AM Blog..

Here's a shortcut link:

On the Nature of Cash, Bonds, Digital Cash, and the Derivative Market

By argentus maximus | Tuesday, May 23, 2017 at 6:26 pm

What factor(s) specifically give(s) a Federal Reserve Dollar Note it's value? A Pound Sterling coin it's value? A five Euro note? A T-Bond or Bund? How about a Venezuelan Bolivar?

What gives a currency longevity overcoming the attacks from external powers? Power? Faith? Reputation? The alternatives currently available, or lack of alternatives possibly? And when a new alternative becomes available, from where does it truly get it's value? From where does it derive it's value ..... ?

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Wed, May 24, 2017 - 6:03pm
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The view of Crypto-FX from a Central Bank's perspective

We constantly hear what bitcoin afficionados think. And I have made my position on this quite clear. I won't touch a private virtual currency using my hard earned money, not even to short term trade it. Past results for others won't persuade me on this due to the comparison with seigniorage and my sovereign opposition action expectations.

But external information may cast doubt upon the BTC fans, or upon myself. Information breadth is required. Reduction of macro to micro, while remaining objective, is one of the things I try to be good at in "The Setup for The Big Trade" thread.

What does the establishment think?

Read this for a first insight into a central bank view:

Bank of England wrote:
... in its original implementation, and still at the time of writing, Bitcoin is limited to between 7 and 10 transactions per second, or roughly 3,500 transactions per hour, perhaps sufficient to provide electronic payment services to a medium-sized town.11 Despite this, the real resource cost of maintaining the Bitcoin network is on the scale of entire national economies. O’Dwyer and Malone (2014) estimate that the total electricity consumption of the Bitcoin network in early 2014 was comparable to that of Ireland (roughly 5GW). Deetman (2016) further estimates that, at current growth rates in computing efficiency and popular uptake, the Bitcoin network could potentially consume as much as 15GW by 2020, similar to the consumption rate of Denmark in 2014.

On this basis alone, we believe that in order for a digital currency system to be socially beneficial over the long run, an alternative method of addressing the cheap talk problem in transaction verifications needs to be developed and adopted.

...

... central banks have always had the ability to grant universal access to their balance sheets through the issuance of banknotes.14 However, banknotes require storage and physical exchange for payment, and pay an interest rate of zero. And the existence of an interest-free financial asset, after accounting for storage and transaction costs, represents the basis for a lower bound (ZLB) on central banks’ policy rates. Various proposals for materially circumventing the ZLB have been put forward, including, among others, a tax on banknotes (Gesell (1916)), a managed exchange rate between cash and electronic forms of money (Agarwal and Kimball (2015)) and the abolition of cash altogether (Rogoff (2015)). However, no central bank has attempted to implement one of these schemes to date.

... our simulations will show, there are reasons to believe that, when searching for expansionary monetary policy options at the ZLB, the injection of additional CBDC would represent a promising alternative to negative policy rates, thereby removing part of the rationale for the withdrawal of bank notes.

...

... So long as banks remain necessary gatekeepers to the payment system, they will have the capacity to achieve systemically-important status if they manage to obtain a sufficient market share. But if a universally accessible and sufficiently large CBDC payment system were to be established as an alternative alongside the existing bank-based payment system, the hypothetical failure of any individual bank, however large, need not necessarily cause an amplification through the economy by impairing payments.

In the event of an actual bank failure, CBDC could also help to ensure an orderly resolution.

...

... Both central banks and private financial institutions are paying increasing attention to the emergence of digital currencies and the distributed ledgers on which they are based, as this technology may present an opportunity to improve the efficiency, resiliency and accessibility of systems that facilitate monetary and financial transactions. There are, however, serious problems with existing private versions of such currencies. These problems are not associated with the viability of distributed ledgers in general, but rather with their prohibitively high costs of transaction verification. Alternative implementations, such as “permissioned” systems, may potentially avoid these costs by stepping away from purely decentralised designs while still retaining many of the benefits. One possible application of such a permissioned system would be the issuance of a central bank digital currency (CBDC) — universal, electronic, 24x7, national-currency-denominated and interest-bearing access to a central bank’s balance sheet ....

Full paper is here:

Bank of England Staff Working Paper No. 605

The macroeconomics of central bank issued digital currencies

John Barrdear and Michael Kumhof July 2016

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, May 26, 2017 - 12:59pm argentus maximus
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Thank you for writing down

Thank you for writing down your thoughts on crypto. Especially as I believe it's far from your favorite subject. While I have to admit that my experience in capital markets pales in comparison to most on this forum, I did have some squabbles with some of the conclusions in this piece.

Looking at the people I know who are into Bitcoin, the reasons for buying are similar to the gold crowd. Expectations of monetary turmoil and distrust of authorities. Bond yields don't really factor in their decision making proces. This could be different for larger (institutional?) parties of course.

One could argue that an (failed?) attack by a sovereign against Bitcoin is something we just saw in crypto. The scaling debate is stuck due to the intransigence of Chinese miners. On top of this, China went after the leveraged trading on it's exchanges, Chinese exchanges halted BTC withdrawals and Bitfinex suddenly has problems with its Taiwanese bank (and Wells Fargo). It's interesting that Japan and Korea moved in to fill the gap in traded volume on exchanges.

I might be seeing ghosts here, but it seems that the US and pro-American powers are pro-bitcoin. With China (and other continental powers) at the very least uneasy about it, and likely against it.

With regards to states not wanting to let go of the seignorage advantage that they have: Imho, the traditional seignorage advantage that governments have doesn't make that much sense in the current age. Printing cash will have us go full Weimar in no time. The current system of bringing money in circulation through bonds only works if you have people buying loads of government debt. This worked with the savings of relatively uninformed babyboomers, but with a better informed and smaller labor force, I don't see it repeating.

Looking at the geopolitical environment and the questionable nature of the seigniorage advantage in the information age, an attack by all governments in concert seems highly unlikely to me.

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Fri, May 26, 2017 - 2:23pm Silver_Surfer
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You think the ransomware

You think the ransomware attack (which just happened to somehow target hospital care centres for the people in a very scary way) and brought BTC to the news connected with that wasn't a combination of sovereigns in action? Who benefits?

Problem: Evil internet ransomware from bad guys we can't trace to put out of business. Worse than drug gangs!

Govt Answer - (All say together) -: "Look we like BTC it's so creative and all. But it's too anonymous for good people to want to be involved in. Here, look at this nice clean, legal, approved version we just introduced. As good as BTC. Works the same. But our one is clean and open and HONEST, and without lumping you in with criminal gangs."

And this too - "We will be working on a way to identify everybody who exchanges money into or out of BTC and all not authorized digi-FX. Nothing to be afraid of! We just need to be able to tax people correctly and fairly so they pay their fair share. And catch any bad guys who try something on like shutting down hospitals and stuff like that."

Bitcoin is just a brand name. All it needs is to get marginalized to avoid achieving critical mass. Competition. The odd court case. PR management. No problem. New brands suprass existing brands all the time, with a little help from our friends.

The blockchain technology can be used by anybody no need for BTC. It's good, but not exclusive.

IMO it's will be good while it lasts but it's tulips.

There was a news item doing the rounds. If you bought BTC x years ago you would have made 30 million bucks. I guarantee you every government department head, every politician, every spy agency executive who read that all thought the same "I could do a lot with that 30 M". One second later:"30M x how many BTCs? Well, Well! How did I miss out on that?" Next round will be theirs.

But we already had the ransomware attack, and more appear to be promised .... so they're not behind the curve, already busy at work.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, May 26, 2017 - 7:26pm argentus maximus
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Well, that was also the frame

Well, that was also the frame that I was looking for when I first heard of the attacks. Interesting thing is that Bitcoin didn't get demonized afterwards. There was only the initial mention of $300 in Bitcoin being demanded. One could argue that this taught the wider population that Bitcoin can be bought in fractions(!). Afterwards there were people blaming the NSA, and some people suspecting or blaming North Korea.

And this too - "We will be working on a way to identify everybody who exchanges money into or out of BTC and all not authorized digi-FX. Nothing to be afraid of! We just need to be able to tax people correctly and fairly so they pay their fair share. And catch any bad guys who try something on like shutting down hospitals and stuff like that."

Here I agree with you. Being anonymous while using Bitcoin is a pipedream at the moment. Trying to evade taxes with Bitcoin is not something I would advise. This is also where the moral downsides of crypto come into play. It could make the world a lot more transparant, allowing tracking of all transactions. There are also anonymized crypto currencies (Eg. Monero, Zcash & Verge), but I lack the technical expertise to judge how credible the promises of anonymous transactions are.

All in all I think the cat's outta the bag. You could marginalize bitcoin, but the next competitor will rise now that the concept of trustless non-government currency has been proven. The declining inflation (deflation in practice) is a masterful way of social engineering and will ensure growth of the network. China tried (temporarily) shutting down exchanges, causing an explosion of OTC volume.

Some other facts that strenghten my suspicion that crypto is not against the interests of the anglo-american, western or perhaps trilateral elite.

Sorry to hijack the thread like this. While I'm still not sure whether I should be a proponent of crypto from a moral perspective, I do believe it should be on our radar.

Looking to trade crypto on leverage? BitMex is the biggest and most liquid crypto futures exhange that offers leverage up to 100x. Click here to get a 10% fee discount during the first 6 months. Please don't wreck yourself by actually leveraging 100x. Alternatives are 1Fox & 1Broker (1Broker has forex & legacy markets also).
Fri, May 26, 2017 - 8:02pm
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@ Silver Surfer:I think

@ Silver Surfer:

I think you're totally right when you say the cat is out of the bag. And this enables given present day private crypto-FX an area to exist and be used, together with a reasonable sized population who will choose to use them.

So even if alternatives arrive displaying the official stamp of approval, there will exist a space for the private unauthorized crypto-FX so long as there are critical mass of users of it. Regulation will probably be designed to stifle and drag independent brands down while not declaring them illegal. They may work with use of fees to achieve the same ends and encourage the useage of "preferred" brands of crypto-FX. I am doing a lot of reading between the lines there! And of course, if they begin with interest bearing digi-cash, this would get the ball rolling for them substantially even if the rate of interest were very low.

A challenge is to decide which one will survive and thrive. BTC has the brand name for the competition present and future to emulate with Ethereum as the #2 contender right now. My take of the process of how the bull swings roll out through the brands is that this seems to be similar to the way a bull swing in stocks begins with quality and in 2 or 3 rotations it eventually rolls out into the insane growth stories, before it all comes crashing down. Maybe we can establish when the process of breadth diffusion within the different brands gets to a point that would predict such a crunch?

Given the inevitability that other brands will emerge, and that nation states will want to introduce their own brands, it appears to me that investment in the right crypto-FX technology which will be used to operate all crypto-FX types might be a better bet. But I acknowledge this is just how I see it so far. There are better experts than myself out there for research into this subject.

And what of the tensions between the west and the soviet-sino bloc? Will BTC et al be used as a currency weapon? I don't like to dwell on speculations like that but prefer in cases like this to focus more upon their individual charts. I might have a way to calculate price levels at which it comes to a stop. No proof until afterwards however and that's the problem.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
randomness