Pailin's Trading Corner

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Wed, Dec 25, 2013 - 8:51pm
Deluxe186
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If I may just ask a question.

If I may just ask a question. Gold drops to $1000 silver to $15. Where would the redemptions for gld and slv be. You've already had a draw down of 500 tons from gld. At sub $1000 there will more than likely be another disgorgement of another 400 tons or so. Leaving what 400 tons....a year and a half ago gld had 1300 tons. The common sense for a drop just isn't there. I understand what the charts say but fundamentally gold is setup for a rally. I wouldn't rule out the possibility but I just think the probability shrinks every day it doesn't drop. Add on to that that the fed has already started its reductions should it need to qe4 it'll be looked at as a dismal failure and I think this time the opinion of the metals changes.

Wed, Dec 25, 2013 - 9:15pm
Rico
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It's only in the Klendathu

It's only in the Klendathu alternate reality that the size of GLD means anything, in terms of the price of gold. No one who matters gives a shit. When there's little in the way of long interest in GLD, it has to shrink--that's how the ETF is set up.

In terms of price, there almost surely will be counter-trend rallies--nothing goes straight down--but the trend is down. It's right there on the chart. When the trend turns positive, you'll see that, too.

BTW, at $1000-1200, the miners can produce all day long, literally indefinitely. It's only if you get down lower (800-900), on a sustained basis, that problems might crop up with supply. That's another big reason that price will bottom in the general areas we've been discussing. In the meantime, the large phyzz buyers will keep getting their orders filled, and it remains in their own best interests to keep the price as low as possible. Masters only feed their slaves the bare minimum to keep them alive and working.

A trader can still make a shitload of money staying short from here to the eventual bottom. A further 20-25% decline is not inconsequential. The price will bottom when it's damn good and ready to--same thing with silver.

Thu, Dec 26, 2013 - 12:08am
tonym9
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Deluxe: Good question. My

Deluxe:

Good question.

My thought process relates to the go-go in equities. Why would any person invest in the GLD/SLV with the backdrop of equities setting new records almost daily? There isn't the level of paper interest that is needed to foster a sustained pm paper rally.

Another point is the silver and gold beatings will continue in my mind for some time. If you buy into TPTB thoughts, there is a strong desire to gather the physical metals at discounted rates. If this is indeed happening, and I believe it is, they can't acquire the metal all at once lest they trigger higher prices. ...and the gathering has just begun. The East will have its gold and silver, of that there is no doubt.

It's too easy for the manipulation to continue. There isn't a reason not to. No one seems to care. For that reason alone prices should continue to be manipulated...and down is the only direction to manipulate.

So the question isn't whether we go down or not. The question is for how long do we go down and how deep is the drop. I've been fixated on 15 silver for a long time now. But 15 silver may prove to be a bump on the road to singles.

The paper market doesn't have to be broken. It just has to be a ghost town. Drive out long interest and you achieve lower sustained prices for a very very long time...possibly a generation.

Eastern thought is not grounded in instant gratification. A generation to gather gold and silver would make sense if you look at it in those terms. The citizenry is being urged to buy physical pm...why?

JFTR I hope I'm wrong. I'd love to see a bottom be put in at 15.

of course all of this can be short circuited by some awful event...pick your poison there. it's too hard to guess for me.

Don't count on the golden pompom todamoon crowd to be right...they've proven themselves wrong too many times. It is prudent to have some pm on hand where you can touch it instantly. 19mids is not the place to back up the truck though. Now is the time to gather powder and make a plan for that truck however.

This is just one more opinion in a sea of buttholes and belly buttons. Take it for what it's worth which is zero.

The chart will speak on its own merit and right now it screams downward bias.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Thu, Dec 26, 2013 - 1:35am
Deluxe186
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oh do I agree with you and

oh do I agree with you and rico but if gld had 400 tons left. To corner the market in gold would not take much effort your seeing it in copper and all you'd have to do is take out the supply not the paper just one massive delivery. Just like in trading places wall st gets a hint of omg there trying to corner the market in one day you could see some massive number. But gld would gld still function as a gold etf with 400 tons?

Thu, Dec 26, 2013 - 7:20am
Deluxe186
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JBLU looks like a nice break

JBLU looks like a nice break out candidate. 22 earnings and 12x foward not to bad a time for one either.

Thu, Dec 26, 2013 - 8:38am
Rico
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The PMs aren't broken for a

The PMs aren't broken for a generation, and silver is not going back to single digits--this is just a bear market.

BTW, the miners appear to be showing signs of brain activity. They're still in a coma, but not quite dead, and may start to recover some function, however little. This is an important development, as speculative money always hunts for positioning in the new year around now, and I sense some feelers. We'll see.

Miracle Max
Thu, Dec 26, 2013 - 8:45am
Big Buffalo
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X-mas Money

Great to see you folks taking your X-mas money and buying some coins. I too found myself looking at the Mexican Pesos, Chinese Pandas, and the pre-1933 U.S. Indian heads. (As well as silver maples). Didn't pull the trigger, but will do so at the next $18 handle.

Silver's getting a nice start this morning, however, I'd like to see where it goes once it hits $20.70.

Finally, USD/JPY and EUR/USD are trading in a nice pattern. Been making a few bucks here and there. Draw yourself a couple 4-hr chart lines. Just keep an eye on the daily and weekly charts though.

Ba-zinga!
Thu, Dec 26, 2013 - 9:50am
tonym9
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15 appears to be a good

15 appears to be a good historical floor looking at monthly/weekly charts and patterns of resistance/bottoms. I hope it holds. Below that I don't have a guess where it stops.

It seems that most of us are coming to the same numbers with different data and perspectives. That is a VERY good thing to a point. But where does it turn into herd mentality?

I haven't read many prognosticators...mostly Avi and a couple of others. I do read many of the blogs (individual posts) to get a very unscientific handle on sentiment...15 is popping up quite a bit.

I agree that silver and gold aren't broken yet, nor are they damaged for a generation at 15ish/1000. 15/1000 is not a certainty btw, just a possible outcome that I weigh at 80/20 probability vs a turnaround. Actually the market could become very very healthy with base-building at 15 and I would like to see that. With time at 18/19 it could also get healthy, but 15 would still be hanging out there to distract and I would it think would need a test or two at that level.

But below 15, tweens flirt with singles, and I think singles would break the resolve of most if not all longs. That's where the break (in interest) could occur. Can market forces prevent deep sub production fixes and counter naked short dumping once pm long paper does breech production costs, if it does? IDK, I'd like to think so. But we have all seen the power and without any real resistance from gov't entities to keep things to a reasonable (sarc) level of manipulation, I wonder if the plan isn't to get to singles. Singles would put a very large percentage of stackers under water...and the whole world of stackers and long paper pm players would look about as smart as the golden pompomers...thus zero credibility (read faith) in the long end of the market...I can see/hear CNBC now: GOLD IS DEAD, GOLD IS DEAD, SEE WE TOLD YOU SO, GOLD IS DEAD! In that situation if you're a long paper player why would you bother? Much easier to go elsewhere. Paper long time horizons would be the only play, the short term stuff would probably be totally dead...thus even less volume and easier to push/hold down. I'm thinking I've fallen into a rabbit hole with these thoughts, but it seems quite possible to me. Diabolical even, which seems to be the way to approach rabbit holes. Somebody throw me a lifeline and pull me out please, I fear I'm thinking jibberish......

Financially I'm planning on 15 being a good floor....maybe we hang in the mid-high teens for 12-24 months to heal. That would be great, gives me more time to stack at a level that I am very comfortable with. But if 15 does break, where does it stop? I don't have a clue.

15 to 7-8 is a 50% haircut and that is worth pondering. The counter thought I have though is this: at singles it would be so much easier to follow it down to lower the dca. I've done the math on it, and even though chasing lower is a lesson I had to learn the hard way, stacking to lower dca is very very doable should there be a visit to singles. It would take me totally giving up any diversification, I'd be all-in metals only, but at singles your talking about major oz gathering. Amassing a 10-20-30000 oz stack would be very possible if metals stay down for a years in the singles. Getting there would be very very painful, but can you imagine having so much pm that you have no where to put it? That's a foggy distant dream land of course....somebody throw me that lifeline please.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Thu, Dec 26, 2013 - 9:54am
tonym9
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wow, at 20 again. i thought

wow, at 20 again. i thought end of year tax adjustment selling would push us lower short term. interesting to see it this morning.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Thu, Dec 26, 2013 - 10:35am
Rico
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Crude number comin' up...

Crude number comin' up...

Add: Traders are sleepin' in...

Video unavailable
Thu, Dec 26, 2013 - 10:49am
Lord Henry
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In 2010

I really thought $5000, maybe even $10,000 were possibly

achievable gold targets by 2020. I really think those numbers

are far out of reach now, regardless of interim bounces etc. While

I recognise that I was seriously wrong, it's still a very difficult thing

to accept - especially when it's clear and obvious that gold will never

be able to achieve a tenth what the 'crypto' currencies have done. Thats

the place to look for serious gains imo; the dotcom boom proved that

sanity and investing dont need to be connected.

Wake me up at HUI 200. No, on 2nd thoughts, please dont bother.
Thu, Dec 26, 2013 - 12:01pm Rico
CK
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Rico wrote: Crude number

Rico wrote:

Crude number comin' up...

Add: Traders are sleepin' in...

Video unavailable

Pretty sure Crude inventories are tomorrow Rico. Sooner or later that market is going to get destroyed. Think that will be one of the better shorts of 2014. Once this Daily-Weekly momentum gives in, It's going to be a cold day (or year/few years) in hell for crude.

Looking forward to large profits in 2014 with intraday short set ups! :0

We're not trading against the market, we're trading against ourselves.

Thu, Dec 26, 2013 - 12:11pm
Rico
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Right you are--just

Right you are--just rechecked. Completely agree about weak crude in 2014.

Pain Street's all hopped-up on their latest get-rich-quick scheme. I won't spoil the surprise...

Thu, Dec 26, 2013 - 1:36pm
csquared13
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Writing Covered Calls

What do you guys use to do your calculations for writing covered calls?

I'm reading Options as a Strategic Investment per Deluxe's recommendation. I made myself a simple spreadsheet to calculate return if exercised, return if unchanged, and the downside break-even point. (based off of the formulas that the author provides)

Is there some sort of simple web-based covered call writing calculator or table that I can use to double-check the spreadsheet I created? I see that some brokerages have this in their trading platforms, but mine is very simple and doesn't seem to have anything like this.

Thx

“Everybody gets what they want out of the market.” -Ed Seykota
Thu, Dec 26, 2013 - 2:00pm
Rico
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http://www.optionseducation.o

Thu, Dec 26, 2013 - 2:24pm
Spinky
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Boxing Day Thoughts

Hope everyone is enjoying the break.

A couple of posts ago I mentioned I would go into the bullion biz. Well I've now got everything set to start trading, except my suppliers are almost bone dry of Silver 1oz coins, with no facility to back-order. Still I took what I could. Holding back stock, or genuine supply issue? No information yet... will update if I hear of anything that could be of use.

Prediction: I'll say we start 2014 with a friendly rally in the metals, then ONE MORE lower low: "the puke".

So, no more lamenting LH; let go, buy bitcoin, sip a coke n' smile. Metals' time is here again, but not yet. :)

To hold a pen is to be at war - Voltaire
Thu, Dec 26, 2013 - 3:03pm
BlackHawk
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Gone short too early

, as usual, WTI short was on too early. Took DTO position in the last stages of the last battle of $98 when I sold UCO. Did not expect price to break much above $98. Grabbed another layer at about $99.40. It's going to take more than UN peacekeepers going to S. Sudan for price to break through $100, IMO. Inventory number and expectations seem neutral or slightly lower inventory tomorrow, pushing price up.

posted 3 hours ago, Big Yawn: https://www.ogj.com/articles/2013/12/market-watch-nymex-oil-prices-rise-modestly-awaiting-inventory-report.html

"The US Energy Information Administration scheduled the release of both its weekly petroleum and gas storage reports for Dec. 27. Because of the Christmas holiday, the government’s petroleum inventory is being released 2 days later than normal while the gas storage report is coming 1 day later than normal.

In a weekly oil market recap, PIRA Energy Group of New York said its analysts believe Brent crude prices will remain robust going into next year.

'Brent crude prices will stay strong into the early part of the first quarter, supported by relatively tight global supply-demand balances and low inventories,' PIRA said."

Thu, Dec 26, 2013 - 3:14pm
ivars
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I am short yen since 102,99

I am short yen since 102,99 and intend to stay short for a few years.

Also, I am long WTI ( 99,24) and S&P ( since 1787) . S&P till 1895, may be more, exit mid January, WTI just to see what happens. Oil is not so easy to manipulate by selling physical or curbing demand as gold, so ..May be that is where money will start to rotate out of bonds and later stocks. I was long also 92-96, this seems to be the continuation of the same move up.

If I could , i would be short UST 10 years with target 4% yield by February.

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
Thu, Dec 26, 2013 - 4:39pm Rico
Art Lomax
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Rico - grains

Bear day in the grains today.

Caught your post earlier about Peter Brandt and the corn market bottom. Right now I don't see much to get bullish about in the grains; corn, wheat, or soybeans. But we are due a short covering rally in both corn and wheat.

However I'm afraid we haven't seen the lows in the corn market. The next crop report is Jan 10 and I expect the final corn crop numbers to get bigger and the carryout increase. The farmer is the long and this market could grind lower all spring as the farmer sells and the markets sends a message to plant less corn. Looking for corn to trade with a $3 handle.

https://www.hoosieragtoday.com/hurt-says-corn-producers-better-tighten-belts/

Beans have been supported lately on hot Argentine weather and tight US supplies, but todays forecast has rain and cooler temps in a few days, and beans sold off. South America has a big crop and I look for bean prices to head south when their harvest starts if we get through January without weather issues.

Waiting patiently on the gold and silver, would like to pick up a few coins as gifts for the grandkids.

Thanks to all for the opinions and ideas. Best wishes for the new year.

Thu, Dec 26, 2013 - 5:46pm
tonym9
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grabbed the last of the

grabbed the last of the needed ATB's. spent way too much on them but the sets are now up to date. buy bug shut down until 15ishland.

back out to the garage for some fun. sitting is not good for cars...blew the cat converter out on my wife's 80 pontiac...i let it sit too long dang it. but it is running well considering a 4 month sitting spell.

today is get garage cleaned up and organized to start the 460 swap in my torino. goal is to have the bay ready for new heart transplantation by new years

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.

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