The setup for the big trade

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Tue, Dec 18, 2018 - 3:15pm
zman
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Deflate the debt away

Oil- $46

2 year bond- 2.65 %      10 year bond- 2.82%.   Bond bears, what's happening?   Booming economy, tax cuts, wage growth, Fed hiking rates, massive deficits, infrastructure spending, tariffs!!!!!!!!!!       All BS, cover those shorts and then go LONG!!

CRB commodity index-  174 today, the low was at 155 in Feb. of 2016.  That's only -11% from today.   It's likely to break by early 2019.

Copper- $2.65  This is the next leg to drop. I see a move to below $2 in short order and then even lower lows. 

US dollar- 97 .   Going to 100 and then even higher in 2019.  This is the plan. 

Gold- $1250  Well. considering the mess in the world today, gold is FAILING to perform, why?    There is no inflation and there's NOT going to be any inflation to hedge against.   Gold does NOT work in deflation, it only works IF there's a rescue and some stimulus.   There is no stimulus or white knight coming folks,  we are just starting to deflate the debt away. 

Tue, Dec 18, 2018 - 9:30pm (Reply to #11611)
Solsson
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Ankeborg
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Solsson wrote:

Solsson wrote:

Du you recognize the number, 16.2? 

Oh, I forgot to mention that 16 is 8+8 ...

#zman

Not a white knight, but mother nature is coming, big time!

Enjoy the ride  ...

Wed, Dec 19, 2018 - 1:59am
Pete
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DX

Very precise selling at the 0-4 line, making r1 a very strong support for a bottom if reached.  The many pivots on the way there suggest correction only.  On the other hand, the 2nd H-bounce pattern got triggered yesterday at the red bar;  should r1 break, DX has potential to decline to the red ML.

Wed, Dec 19, 2018 - 12:19pm
Pete
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Gold pre FOMC

Price reached a critical area on the chart for the continuation of the rally, where r1 of the recent correction (both target and resistance) crosses the latest median line.  Price put in a (slight) volume reversal to the downside on the 60m, but the 30m chart gives a different picture as volume dries up, and prices drift as traders await the FOMC announcement.

Wed, Dec 19, 2018 - 5:51pm
AGXIIK
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SOLSSON---DOW CLOSING 23,323.66

Even I saw that one.  Kind of jumped off the page and bit me in the nose

AGXIIK

Wed, Dec 19, 2018 - 9:25pm
Pete
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@zman

You've said it maybe 100 times, but I don't understand your concept of "deflate the debt away".  Seems to me the value (cost) of the debt increases if the currency in which it is denominated rises against other currencies, or gold. 

Even when I google "deflate the debt away", there are no hits.

Thu, Dec 20, 2018 - 10:26am
Pete
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Fast move in progress?

In the Feb gold chart:  I began to suspect something like a running correction wave 2 after the rally out of November low, which was a Gann "3rd higher bottom" from the powerful monthly R1 line in the Dec 2018 contract.  My suspicion was confirmed with the "h-kicker" low at the red arrow, the day after price made the minor low ON the latest ml (that was dead horizontal, btw, another suggestion of the running correction idea).  Then yesterday, with the virtually-always selling of gold with the FOMC announcement (a MOPE control measure assisted by short term specs), the price returned to the h (green arrow), where buyers exceeded sellers.

And now we see a launch higher, which I hope is going to close over the ml today (for strength) and yesterday's high (to negate the bearishness of the turn lower after the possible 5th pivot to latest r1 line).  The pattern of the last several days seems to be confirming that gold is in a fast third wave higher, especially if there was a running correction.  We shall see.

It's early in the trading day in NY, and I'll bet many are surprised at this sudden reversal to the upside, given that usually there are two days of selling with the FOMC.  Lots of short covering going on.  As I send, gold is continuing higher.  Go gold!

Thu, Dec 20, 2018 - 4:25pm (Reply to #11617)
zman
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Pete wrote:

Pete wrote:

You've said it maybe 100 times, but I don't understand your concept of "deflate the debt away".  Seems to me the value (cost) of the debt increases if the currency in which it is denominated rises against other currencies, or gold. 

Even when I google "deflate the debt away", there are no hits.

The most important debt is US-T bonds, what do you think would happen if we end up with $30 trillion in a few years with average interest rates at 5%?    Yes, that would be $1.5 trillion just in interest payments on the debt.  

Next year the estimate is $3.4 trillion of tax revenue, do you really think we're going to live in a world with 40% of tax revenue going to service the debt?  The answer is NO.

What happens if we continue to drain money out of the system?   Growth and inflation are dead, and deflation takes over.

What happens with $30 trillion of debt with average interest rates at 1% or even lower?    The interest payments are almost NOTHING at that point.  All that debt will be rolled over into very low interest bonds. 

The EU and Japan are already doing the same thing, interest rates are NOT an issue. The problem is that other forms of debt get defaulted on and bank bail-ins are going to be used to bail out the banks.  

The corporate bond owners are going to take over the companies that fail to make the interest payments, they're going to make out just fine as these shareholders are going to hand the keys over to the bondholders.  

The bad student debt, credit card, mortgage, auto debt and junk debt will be served with bank deposit bank-ins. 

The end result is everything is going lower, but the US bonds and US dollar will be the big winners.  Could gold get a bid if people start worrying about the bank bail-ins?   Maybe, but the deflation could bring the price very low before that happens. 

Look at zinc today- down -25%!!!      

Fri, Dec 21, 2018 - 1:09am
Pete
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DX

DX has nearly reached r1 of the last major pivot rally.  Odds strongly favor a turn here, with a retest of the high relatively quickly.  There's a tight, corrective wedge of 5 min-3 pivots, holding above the prior p4 low.  A very bullish setup, absolutely textbook.  BUT, if there is a break lower, with closes sustained below r1, something very big is happening.  The major pivot, downsloping ML becomes the key target.

@zman:  I am pondering your reply...

Fri, Dec 21, 2018 - 2:23pm
zman
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gold oil ratio

https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart

Now over 27, this is very high by historical standards.   It's not likely to go much higher and oil is likely to drop even lower.  So that means gold is likely to also drop in get the ratio back in line.   If the ratio goes back to 16, which it was in Sept. of this year, we're looking at $740 oz gold price.   

The system will continue to be drained of money,  there is no QE or stimulus coming. Pension funds will reduce payouts by -50% or more, SS, medicare and other programs will be cut big time.  

Bailing in bank deposits will be extremely deflationary,  cash will be the king of all asset classes.   It's the only choice the people in power have today, they must preserve currency and government debt. 

Fri, Dec 21, 2018 - 2:49pm (Reply to #11616)
Solsson
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Ankeborg
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AGXIIK wrote:

AGXIIK wrote:

Even I saw that one.  Kind of jumped off the page and bit me in the nose

You got Phi+Phi hidden in there 3236

yes these numbers are surrounding us, look at my gold vote:

8+8+8+8=32 and 23.6 is a number that Argentus appreciate.

Winter solstice today the Gold and the Suns weakest date of the year. It manifests exactly at 23:23 in CET.

Fri, Dec 21, 2018 - 8:19pm
Solsson
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Ankeborg
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What a foolish article. This

What a foolish article. This thread has plenty of proof that synchronicity does exist. 

https://www.livescience.com/43105-synchronicity-definition-meaning.html

and I just found out that we are getting closer to Phi² ...

Great timing!

Sun, Dec 23, 2018 - 9:15pm
zman
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Dumb and dumber

So one would think the bond bears would wake up and start realizing that the global economy is getting taken over by deflation and start covering their short positions on US T-bonds, right?   

https://www.zerohedge.com/news/2018-12-23/sorry-jeff-treasury-short-sque...

Nope, not only didn't they cover, they ADDED even more short positions to an already all-time high level!!!   Wow, talk about being stubborn.

This is how we get all-time record lows on US T-bond yields,  they're going to have to cover with massive losses in a panic.   I believe we will see negative yields in the US, just like Japan and the EU today, it's just a matter of time.  

Just think of the state of the US economy at that point, they're going to call it a "deep recession" and low interest rates are "good for everyone", but the reality is that it's going to really be a true economic depression. 

If only the "dumb money" knew what the plan truly was today.  I guess the only question remains, what and why do they start covering?  I say once the 10 year hits around 2.30% or lower, they're going to get that strange feeling in their stomachs and the covering will just start in the bond market. 

Mon, Dec 24, 2018 - 2:32am (Reply to #11612)
Solsson
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zman wrote:

zman wrote:

Gold- $1250  Well. considering the mess in the world today, gold is FAILING to perform, why?    There is no inflation and there's NOT going to be any inflation to hedge against.   Gold does NOT work in deflation, it only works IF there's a rescue and some stimulus.   There is no stimulus or white knight coming folks,  we are just starting to deflate the debt away. 

I disagree, I think Gold and Gold miners are doing quite well considering the circumstances, just look at the stockmarket. You must think bigger zman, you are locked on the deflation part. That's just one of many steps in this collapse sequence.

Mon, Dec 24, 2018 - 2:50am
Solsson
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Ankeborg
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What will happen in 2019?

What will happen in 2019? Look at this mother of all head and shoulders ...

and if this pattern plays out, what would happen to gold and maybe silver too? 
In 2008 gold followed other markets down into the abyss, but not this time. Maybe this time is different?

Go Gold!

Mon, Dec 24, 2018 - 2:54am
Solsson
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Ankeborg
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Sorry for the people that got

Sorry for the people that got killed in the Tsunami accident yesterday. I guess it was the peak of an GV event starting off with a local one, then regional and finally a global event.

https://www.theguardian.com/world/2018/dec/23/sunda-strait-tsunami-is-la...

23rd of December in 1997 still remember the date ... not a happy one.

Mon, Dec 24, 2018 - 3:12am
Solsson
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Ankeborg
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God Jul  

God Jul smiley  Merry Christmas

1+1618 yes  the Phi Squared post in Setup

Just out of curiosity I searched the meaning of Phi² and was surprised to find this:

Three wise men, three lights:

Hmmm, that pattern looks familiar ...

Mon, Dec 24, 2018 - 8:35am
Pete
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Feb gold pre open

Twenty minutes before the official opening of Comex gold (8:30 ET)

The gap up open Sunday PM has led to a rally up to the r1 of Friday's selling from the recent high, zooming at a possible p1 in the process.  There are 5 small pivots in the advance.

The 30m chart shows with great accuracy the support and resistance concepts of Andrews/Babson techniques.

As I send, the r1 line is proving a resistance to further advance over the last few minutes...in fact, a reversal lower probably is happening (a red bar in progress).

Mon, Dec 24, 2018 - 8:59am
Pete
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Quickie update Feb gold 15m

15m chart shows volume reversal off the r1 line, and a second r1 rebound. Push and pull continues...

Mon, Dec 24, 2018 - 10:27am (Reply to #11626)
zman
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Solsson wrote:

Solsson wrote:

zman wrote:

Gold- $1250  Well. considering the mess in the world today, gold is FAILING to perform, why?    There is no inflation and there's NOT going to be any inflation to hedge against.   Gold does NOT work in deflation, it only works IF there's a rescue and some stimulus.   There is no stimulus or white knight coming folks,  we are just starting to deflate the debt away. 

I disagree, I think Gold and Gold miners are doing quite well considering the circumstances, just look at the stockmarket. You must think bigger zman, you are locked on the deflation part. That's just one of many steps in this collapse sequence.

"considering the circumstances"

I was told a bear market in stocks was all gold needed to breakout, shouldn't gold be higher than $1260 oz with all global stock markets now in bear?    There's a reason why gold isn't breaking out,  there's no inflation to hedge against.  Could that change?  Yes, but fiscal policy would also have to change and that's not likely to happen.  

"locked on the deflation"

Well, I'm locked on what the markets are saying, not on what I want to see.  It appears that a deflationary collapse is the more likely scenario if a "collapse" is even in the cards.   I have been pretty spot on with my predictions, but I'm still opened minded enough to change my outlook IF things change in the markets. 

IF gold were to breakout of the $1375 resistance, then we MIGHT have something to discuss about gold performing well, but that hasn't happened.  I believe gold is going to need something more than new QE, lower interest rates and declines in the stock markets.   We would need to see inflation that couldn't be defended, that's NOT likely to happen.