The setup for the big trade

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Fri, Sep 14, 2018 - 10:42am foscotanner
zman
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foscotanner wrote: I have not

foscotanner wrote:

I have not been able to play with the charts.... But if you look at the gold bear from 1980..... It has a nice dip at the end..... Something argentus drew my attention to when looking at something else....

So you look at bear from 2011. It has the nice dip in gold and silver recently..... Kind of got my attention.

What's missing is the impulse move out of it.... If its a really key bottom, then it would be nice if most of the dip was reversed this month.... Otherwise, we my well be heading down.... But there is scope to kind of just go up, up and up.... Since there are shorts to cover....

I hate to say it, but we're most likely in a long term bear market for gold. We are only 7 years in and it could be like the last bear market that lasted over 28 years.

It's really simple today, they can NOT allow any form of inflation because of the debt, as a result the gold price will remain very depressed.

Look at it this way, there's no issue with the Nasdaq going from 1500 to 8000, nothing bad happens regardless of how it got there. Today, if gold went from 1200 to even 1600, the whole world would be in a complete mess with no solution.

It's not an option for gold to go higher, when the people in power control fiscal and monetary policy, there's really no chance for "the markets" to function like it did in the past.

All the people calling for higher gold prices and higher bond yields are living in a fantasy world, simple math can tell us it's not an option. The smart money knows about this issue and has played it correctly, we don't have the luxury to have markets anything different than we have today. High stock prices, low bond yields and gold prices are here to stay.

Fri, Sep 14, 2018 - 11:50am zman
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Interesting call.

I am actually considering that we are in a long term bear for gold.

I'm as bullish as they come on gold. For me it's a matter of when it turns.

So the fact I am thinking the bear could be here to stay says that either I have realised I'm wrong or a turn is very close and the stronger hands are turning.....

Very odd feeling.

I am tempted to sit back and ignore gold until 2019 and see where we are at. Either it would have turned or will probably be around current levels anyway.

What is stopping me at the moment is that silver is very oversold and the miners got oversold and are acting as though they want to bounce. There is a realistic chance the miners post a bullish engulfing candle on weekly level today. It's worth keeping an eye on. That's keeping my interest in the short term. That's looking at the gdx.

Fri, Sep 14, 2018 - 11:52am zman
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Interesting call

Duplicate. My bad.

Fair to say a bottom in miners now also an interesting piece of jigsaw.

Fri, Sep 14, 2018 - 1:36pm
zman
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Another fool here

https://www.zerohedge.com/news/2018-09-14/peoples-qe-coming-and-result-w...

It seems like every week there's another fool predicting free resources for the broke peasants. These guys are beyond naive in my opinion. The elite aren't generous people, their number one goal is to stay rich at the expense of other people.

We didn't get here by accident, there are no mistakes here. The wealth inequality isn't because of policy failures, it's because of policy successes.

"A 'people QE' will supposedly ensure the new liquidity is injected into the hands who will spend it, generating the demand to lift the economy"

So why haven't they done that in the past 10 years??? If this guy thinks they're going to blow up the bond market to help Joe Six-Pack, I want what he's been smoking.

"The result will most likely be a disaster"

And then he answers his own question, of course it would be a disaster for those that own the financial assets. That's why it's never going to happen. These people aren't stupid like this guy thinks, they're several steps ahead of him.

Sat, Sep 15, 2018 - 4:44pm
zman
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Selling

https://www.zerohedge.com/news/2018-09-15/panic-over-currency-crisis-tur...

Lots of lessons here guys, the common theory is a currency crisis is bullish for the gold market, clearly that's not the case today. How many emerging market currencies have been hit hard this year? Too many to count.

In my opinion, this is likely just the start of the problem in those markets. The US is taking dollars out of the system and there's no end in sight. How many more countries are going to be forced to sell their gold regardless of the price? Is China, Russia or India next?

Look at the 2 year 10 year bond spread today. Now at just 0.21%. So are the bank shares selling off? NO. Is there any concern about the credit cycle? NO. The fact of the matter is that it most likely doesn't even matter anymore. Will an inverted yield curve make any difference? I'm starting to have my doubts.

The concerns are all based on the theory that the current economy is in a "normal" credit cycle like in the past, I don't think that's the case at all. Maybe the markets also realize that it only matters if the credit cycle is normal and it's not today and that a flat or inverted yield curve does NOT matter.

Does anyone else notice that none of the past economic predictors work at all anymore? All the rules have been broken and none apply to todays new environment.

Sat, Sep 15, 2018 - 8:00pm
Pete
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Alasdair Macleod's latest

Published on Friday. A must-read (and must-heed) imo:

https://www.goldmoney.com/research/goldmoney-insights/the-dollar-is-cent...

Sat, Sep 15, 2018 - 9:40pm Pete
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Pete wrote: Published on

Pete wrote:

Published on Friday. A must-read (and must-heed) imo:

https://www.goldmoney.com/research/goldmoney-insights/the-dollar-is-cent...

I'm sorry, but how in the world can this guy rationalize that a big mess in the EU will force them to hike interest rates off of zero and as a result that will tank the US dollar? I mean seriously, this is complete nonsense.

These guys aren't getting it, higher deficits do NOT mean higher yields. In fact, higher deficits mean less US dollars in the global supply.

https://wtop.com/national/2018/09/us-budget-deficit-hits-214-1-billion-i...

Are long term rates moving higher on this news? No, the 10 year can't even break 3%. Just wait until the global slowdown and the strong dollar hit the developed markets. US bond yields will be headed much lower in 2019, this is by design.

This guy is worried about inflation which is complete nonsense, everything is pointing towards even more deflation. Looks at the CRB commodity index, it's been going down for months and only supported with an oil price near $70, everything else is down hard this year.

Sat, Sep 15, 2018 - 9:53pm zman
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So we buy bonds and short gold?

What % do you recommend?

kentucky
Sat, Sep 15, 2018 - 11:16pm
zman
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Gold/bond ratio tells the whole story

Gold/Bond (30 year) ratio tells the truth. In my opinion, this ratio breaks the Dec. 2015 low and then heads significantly LOWER. Does that mean gold has to go much lower? No, the bonds could rally and gold could stay flat, but more likely than not if deflation takes over BOTH bond yields and commodities (gold included) head lower in price.

There is no reflation, weak dollar, stimulus or free money for the peasants to save the day. This is where we're headed because there's no other choice. Almost everyone is in denial about it, they have so much faith in the people that created this mess in the first place. The debt has now pushed these people into a very small corner, they're going to be very cruel.

Look at the EU today, it's called fiscal austerity with almost no deficit, there's no growth, there's little inflation and there's NEGATIVE bond yields on almost ALL of the government bonds. That's where we're headed. It's called a non-stop recession for Main Street and elite get to live the high life.

Sun, Sep 16, 2018 - 3:26am zman
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zman wrote:I hate to say it,

zman wrote:

I hate to say it, but we're most likely in a long term bear market for gold. We are only 7 years in and it could be like the last bear market that lasted over 28 years.

I respect your contrarian view, but I think you are wrong. Yes I've heard that opinion before and it was a clever one. As I've explained before there are rolling wheels in markets.

My Armstrong "The Forecaster" trade was one of them. A Pi relation that supports zmans view. How many years do you have between the Gold bull top of 1980 to 2011? Yepp that's correct 31,4 years, Pi times 10. We have 24 years left before the next top, what a bummer ...

However I do not think that is the case this time. Maybe there are other mathematical patterns that affect the timing and price of Gold?

Maybe we will have a turn tomorrow?

Sun, Sep 16, 2018 - 4:10am foscotanner
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foscotanner wrote:I am

foscotanner wrote:

I'm as bullish as they come on gold. For me it's a matter of when it turns.

Tomorrow?

My dad's 80 year birthday tomorrow the 17th, 1+7=8 + 80= 8+8=16 the magic number for Gold, 1+6=7 the fatal number, time for a turn!

Yes look at Venezuela, one of the richest countries in the world and totally destroyed by communism/socialism.
Rates in Venezuela are skyrocketing and the currency is complete trash, we are heading into something similar I guess ...

Sun, Sep 16, 2018 - 7:55am
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Fiscal austerity causes

Fiscal austerity causes repercussions. "Democracy" has a price. It gets paid or it does not get paid. Non payment causes different repercussions. Some repercussions are good for some of the people in charge, while other repercussions are good for different people in charge. Likewise with the downside effects of the various repercussions.

In simple words, we get more democracy and pay the price or we move to true democracy and pay the price. Is the democracy we have worth its cost?

During "austerity", have any sectors not been cut back? This is a clue as to the policies you should be looking at, not the tripe in the news. BE FORWARD LOOKING. You can't evaluate the duration of current price swings from data in the news! Every swing ends sometime. Even every retracement.

Use three, six, ten, fifteen, and twenty year chart widths.

A place to start if you want data about what is not discounted into price yet. What departments of your local government are recruiting, wherever you are? Are regional wannabee empires like the EU opening up, or closing off, free speech in their unruly provinces? Which faction is in the ascendant curve? Can you predict the next clash of factions?

I suggest forgetting the funnymental data. Somebody else always gets that before we do if it's worth having. What isn't, we are better off not hearing. Look at the fundamental structure of the participants self interests rather than what they announce.

Fundamental structure: Have bonds topped? If yes, where is the retracement rally from the first decline? If yes, what would deflation do for bond prices? What does deflation do for the people who sell bonds to raise funds? Where will those people deploy such funds? Remember they are short bonds! But they still require rallies (a bond bullish wave) to short more bonds at overvalued prices. Who are they?

Not on your charts yet, soon to be.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Sun, Sep 16, 2018 - 8:47am
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Catherine Austin Fitts

Catherine Austin Fitts - We’ve Reached “Never Never Land” Accounting
kentucky
Sun, Sep 16, 2018 - 10:44am
zman
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Sprott

Then a guy from Sprott writes a piece completely filled with holes. https://www.gold-eagle.com/article/when-us-stock-market-crashes-buy-gold

His first mistake is claiming that issuing more US bonds will make yields go higher and calls it based on supply and demand. I'm sorry, but it doesn't work in that manner. Either way, he makes the case for gold because the Fed will buy bonds with another QE program. Did he forget how ineffective global QE has been for the price of gold the past 8 years?????

So he's basically suggesting a global slowdown and weak stock market will kill the bond market forcing the Fed to start another QE program. My point to him, so what? Investors aren't going to flood into hard assets because central banks are buying bonds again, been there done that.

One would think that after 10 years of monetary policy people would have learned a few basic lessons, but that's obviously NOT the case at all. A central bank buying assets from the very elite is NOT an inflationary policy, it makes no difference.

The only fashion we could see inflation and a higher velocity of money is with a radical change in FISCAL POLICY!!! Did you notice these fools never mention fiscal policy?

IF the stock market goes down hard, the Fed will buy the SP500 and most likely corporate bonds as government bonds will have plenty of buyers at low yields. None of this will be inflationary, people need to get used to the new world of monetary manipulation.

I stand by my original thesis, they're going to deflate the debt away. Only a few can see it today, it's just a matter of time (6 months) before it becomes obvious.

Mon, Sep 17, 2018 - 5:07am
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"When deflation hits, stay

"When deflation hits, stay out of precious metals markets" I hear that a lot at other forums.

In 2008 that was true, but I am not so sure this time. Take a look at Gold now and compare it with the situation we were in 2008, it's almost a polar opposite.

I do not know, I am only guessing of course, but it feels different this time lol ... time will tell. I might be 2-3months early. The turn is not primarily in the metals, but the miners. Just to make things clear.

Mon, Sep 17, 2018 - 10:37am
zman
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Metal bounce

I also think metals are due for a slight bounce in the next few weeks/months, but will it hold or just breakdown even lower?

The Dow/Gold ratio just broke out to ANOTHER recent high last week, now at almost 22. https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-c...

We can see on the long term chart that this ratio is likely headed much HIGHER in the years ahead. Which means stocks will continue to outperform gold. It appears the ratio is headed back to the 40 ish level once again. How do we get to Dow 36,000 and $900 gold in the next few years?

Mon, Sep 17, 2018 - 11:05am
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Trading the Vee strategy

Just throwing this out there for consideration.

What if I gave you a simple, specific formula when to short then go long, then sell, and I gave exact dates every year to do this... could you make money in the volatile, unpredictable gold markets? Well you could have over the last five years, each and every year... Here is the formula:

(1) Go short the first week of November

(2) Cover that short and go long the second week of December

(3) Exit the trade the second week of February.

Crazy as it sounds, this takes advantage of the repeating V pattern that we have seen basically every year for the last five years, going into the end of the calendar year. Check it out:

Those are unleveraged gains, no idea what it would have been if you played futures and options (many times greater, of course).

The question is, do we see this for a sixth year in a row? Not one of those prior times did the chart look like it does now, with 5 straight months of merciless decline (except maybe 2014, where the end-of-year bottom came a month early)... that might suggest an earlier V. Also, the COT report has never looked this bullish so early- the COT structure now looks alot like those that appear at the prior V bottoms in early Dec. So maybe our V is early, or maybe the worst is yet to come. Food for thought...

Mon, Sep 17, 2018 - 11:16am Pining 4 the Fjords
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Nice to see you back posting Pining!

It works, trading the seasonal during highest seasonal volatility.

Would it be better on eg silver? Possibly with a 1 month shift of the dates if testing demanded?

Also, what does it do in a bull market? You are optimising a seasonal trade for the bear. But a downtrend is only one of the four market types: trend up, trend down, ranging less volatile, ranging more volatile. Does the seasonal generate profits in the other phases of market? My guess would be the date might move 2 weeks earlier, then do a double bottom, but I haven't looked in recent years to see it is still that way.

This will be a good year, providing the support holds. If it doesn't this system becomes a JS trade. For which stops can be used of course.But I have reservations about stops where central bank hedge trade markets are concerned. Can you get GTC ATZ stops? (good till cancelled all time zones) Even by entry into al alternative hedge asset. Got to respect that 2 AM shift, Far East holidays, etc, etc .....

It's nice to see you're perusing the page and tossing (good) ideas into the ring.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Mon, Sep 17, 2018 - 11:49am
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Thanks AM!

I always lurk and read everything, but between a personal commitment to trading (I've discovered about myself that publicly posting about trades etc has a bad effect on my ability to respond to the markets and jump in/exit... the human desire to be publicly right alters my judgment) plus major (good) things happening for me in my "real job". So I've been just trading and working.

But I have been keeping my eye on the upcoming Dec-March timeframe for years now, thanks to a certain analyst ;-) so I do expect big changes in the way metals trade. Bear or sideways churn market techniques may not work going forward. As always, the tricky part is identifying and catching the turn... then deciding on what vehicles are best suited to your own personal trading style/preferences, in order to maximize returns. Not sure if I have this one yet, aside from the widow-makers NUGT and JNUG.

And no, with my current broker I cannot get overnight stops to be honored, and am thus subject to the London stop-runs... only way I can figure to avoid it is be right!

Mon, Sep 17, 2018 - 4:20pm
zman
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Pento missing it here

https://www.gold-eagle.com/article/reality-check-now-progress

Correct me if I'm wrong, but "These central banks are being forced into a tightening monetary policy due to rising consumer prices"

Really? Of all the major central banks only the Federal Reserve has hiked rates, but was it due to "rising consumer prices"? The CRB commodity index is still down -50% from 2011 and near -75% from 2007. https://tradingeconomics.com/commodity/gsci

"and asset bubbles that have become a major risk to economic stability"

Really? The Dow at 26,000 and Nasdaq at 8000 is a problem now? The risk is a low stock market, NOT a high market.

No Micheal, the reason why the Fed decided to hike rates was to keep the dollar strong and then have an excuse to go to negative interest rates and buy corporate assets (stocks and bonds).

"The truth is as long as the bond bubble kept inflating it was able to mask huge imbalances"

I have news for him, he hasn't even seen a bond bubble yet. He's going to be surprised when it sees the US debt at $30 trillion and the 30 year bond yielding 1%. Yes, deflation is going to really make the bond bubble, but the problem for him it's going to take decades to burst.

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