Pailin's Trading Corner

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Fri, Dec 16, 2011 - 2:26pm searcher-wamh
pailin
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searcher-wamh wrote:Martin

searcher-wamh wrote:

Martin Armstrong just came out with a new update on the Gold price (short term). Those expecting a Santa rally are not going to like it.

Armstrong places a lot of weight on bad weekly and monthly closes. I'm not saying he's wrong about that either, just noting. Is his update public somewhere or can you share a bit more?

EDIT - thanks guys!

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Fri, Dec 16, 2011 - 2:29pm
searcher-wamh
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Try this link for Armstrong's

Try this link for Armstrong's article: https://armstrongeconomics.files.wordpress.com/2011/12/armstrongeconomics-whats-up-with-gold-121511.pdf

It's public.

Basically he says if we close below 1605 this week, we are likely going to retest the 1225 to 1325 area. Get out your February puts.

Searcher All flesh is as grass, and all the glory of man as the flower of the grass. The grass withers, and its flower falls away, but the word of the LORD (Yahweh) endures forever. 1 Pet. 1:22-25
Fri, Dec 16, 2011 - 2:31pm
sp001
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plunder i understand what you

plunder i understand what you are saying now...option pin to me means it will land on the max pain strike. u r correct in ur explanation now. i trade butterflies on the max pain strikes so was curious how u got that. this actually helps and may explain why my other underlying pins do ok but slv does not.

Fri, Dec 16, 2011 - 2:32pm sp001
plunder
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SP - numerically it doesn't

SP - numerically it doesn't make sense to me either. Should be the whole dollar, but somehow silver pins to the quarter, not the dollar. They do it almost every week. I started fitting a curve to the option pain bar charts to guess where the pin might be.

atlee, just kidding around with the engineer thing. But you're right, and it's one of the things i learned from your rants about engineers: if I can't solve for it who cares, it is what it is. Just go with the observations and worry about the rest of it in the background.

As for the closed-loop crap, I give you exhibit 'A' the EURUSD last night. See how it starts on a line, gets jumpy and then damps right back down to the line? That is what I am talking about. This picture could be from a control systems textbook.

Fri, Dec 16, 2011 - 2:55pm
Vypuero
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My shorts for anyone interested

Shorts based on Trend Down + slow stochastic (sell when it crosses on the upside, preferably overbought) and below 50 DMA:

BSBR at $7.80

CHK at $24.63

FSS at $4.15 (this one is up and stochastic has embedded, hopefully it will head down soon)

IMN at $6.05

ININ at $23.80

LUK at $23.34

MFC at $11.05

NFLX at $69.43

RSYS at $5 (also one that is up still)

STD at $7.17

2 were closed out at a profit, one was First Solar from $48 down to about $35 (and it is still going down more but I took profit)

1 was stopped out right on the same day I placed it for a moderarte loss - I place stops at the previous high, or sometimes the 50 DMA depending on the chart pattern.

Hopefully even if we get a mix of good and bad in the market these will perform poorly, as they have been for awhile in all cases. I look at the weekly to be sure that is also sloping down. I have a lot of long targets but they are all overbought still I want to buy them when we have a selloff, where I can cover my shorts.

Fri, Dec 16, 2011 - 3:12pm
MisesFan
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More fun with...

weekly charts. It is Friday, and I have zero motivation for my day job.

Scenario 1

For the US $, a potential double top at ~80.5.....going back to Dec 2010. Interestingly, Silver's price a year ago is almost exactly the same as today's price.

If the US $ fails here, it could fall to 76ish, which would correspond with Silver's potential run towards $35-$40.

At which point, the dollar could reverse and bounce off of the 76 area and then run to 88 (Euro fail at this time??). Which would also correspond with Silver's retest of the $20 - $24 range. Finally, the FED would then kick QE into the "public realm" which would cause the $ to have it's Wile E Coyote moment, and for Silver to have it's Road Runner face rip move to $50.

Scenario 2

US $ continues to run up to ~83, Silver falls to the mid-twenties. US $ double tops at 83 falls to 76 or lower, and Silver runs to $45 from the mid-twenties. The US $ bounces off of 76 and heads toward 88, with Silver falling to $18 - $20......then the $ cliff dives from 88 and Silver begins the run up to $50

Scenario 3

US $ continues to run to 88 for a double top, then falls hard with the latest version of QE. If the US $ makes it to 88, silver will be hanging out at $18-$20. Which would then set the stage for the epic face rip to $50.

Scenario 4

I just continue watching Road Runner/Wile E Coyote clips on youtube.

Wile E. Coyote vs Road Runner

My $ is on scenario 1. However, looking at the US $ back to May2004, the US $ has already double topped at ~92 and ~88, which means scenario 2 has potential. The US $ also has the potential to retest the 71 area, which would be when silver runs through $50.

Regardless, what is all boils down to, is that Silver is the US $'s bitch. I believe that silver will see $18 - $20 before it sees $50. In the near term, I am trading as if silver will see $35 - $40 before the mid twenties. This could change if the $ runs to 83.

wtfdik

Fri, Dec 16, 2011 - 3:35pm
redwood
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I'm afraid I don't see a

I'm afraid I don't see a rally coming next week, except there may still be turnaround Tuesday. Beyond that I'm not too confident. Please excuse the fact that I make these statements from a multitude of sources of info. It's not just off the cuff. But this time I'm uncertain, just erring on the side of caution.

Fri, Dec 16, 2011 - 3:53pm
T
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@ Mises

.... and redwood .......I like your forecast. Maybe #1 sounds best to me as well. I dont sense silver falling as far as 18-20 but I'm looking at 22-25 first. willing to buy alot at 22 area. 20 seems excessive. wouldnt china step in and buy at 25 to 22 area? who is going to wait for 20 ?

USD peaking at 88 area, a nerwsletter I follow is forecasting that as well. Others are saying USD falling to 72 and from there becoming toast.

I also think the high target for silver , you say 35 to 40 ? 40 seems high to my eyes right now....there looks like a big resistance at 36 area... I might say 32 to 36 as a top for 2011....40 is a long way off.

I think it will retrace back to 28/27 before it goes up to 34. but mostly.....WTFDIK

I also think we will see another wave going down next week ,a smaller move ,not another collapse like this week, but a finishing bottom. Maybe corresponding to S+P dropping to 1180-1170 area but not 1150 or lower. or maybe 1155 but Bouncing Strong with alot of PPT behind it to start a big rally thru 1200 and then holding up 1200 and xmas rally at last. yippee.

Fri, Dec 16, 2011 - 4:15pm T
MisesFan
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@T

I don't think Silver will hit $40 in 2011....more like sometime in late January/early Feb. $40 is the high end of the range. My $40 estimate is based off of the price move from June 26th - Aug 21st (weekly chart).

A test of $20 would mark a full retrace of the move from Aug2010 - late April2011.

Fri, Dec 16, 2011 - 4:17pm
Strawboss
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Martin Armstrong

From his most recent commentary - he talks about the demand for gold getting "tired". Hasnt he seen the sales/import figures for China for the past few months? They arent getting tired - they are ramping it up. Purchases are off the chart in China. Same in India.

The guy is obviously very insightful and connected. I cant help but be somewhat jaundiced though. If you understand his story - you have to think he is very angry with the US government and would like to get even with them in some fashion (he obviously had plenty of time to think it over sitting in a prison cell).

Another perspective is that he made a deal with TPTB in exchange for his freedom and agreed to be their tool to suppress the gold market through his influence. And his attempts to discredit any type of manipulative behavior - especially in the silver market... Heck, even Bart Chilton thinks there should be prosecutions.

I dont know. I just dont trust the guy...

Just sayin'

Jesus Christ is the only true hope that any of us really has. Aaaargh .. the monkeys!!! Trading metals is like playing frogger...there's always a big truck coming.
Fri, Dec 16, 2011 - 4:27pm
Vypuero
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stopped out of RSYS but other positions look good

don't know why it popped but there you have it, it reversed and so I got out. I think I jumped in too early. I need to wait for the full SSTO crossover (I use 14/3/3).

Fri, Dec 16, 2011 - 4:35pm
Titus Andronicus
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Turd's argument seems pretty convincing to me.

I'm going to try to stay long from here.

Also, I think it is a good time to go a bit longer in the miners. Barring some bad Sunday night action, I'll probably add a bit to my miners come Monday morning.

Fri, Dec 16, 2011 - 4:42pm Strawboss
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Strawboss wrote:And his

Strawboss wrote:

And his attempts to discredit any type of manipulative behavior - especially in the silver market... Heck, even Bart Chilton thinks there should be prosecutions.

Really? I read him somewhere (so I'm paraphrasing here) saying that everything is manipulated so why bother talking about it further. Probably the same net result but not exactly the same as saying it's not happening in silver specifically either. I view him the way I do Rickards, very connected and not necessarily to be trusted as a friend of PMs. They're both essentially globalists that see gold as the single currency (as opposed to SDR or whatever other IMF currency/ies may/can emerge). But more often than not both are prescient (or inside?) with their macro calls. Everybody's micro calls suck quite often. Everybody's. Even mine. That's why if you're trading less than weekly holds (and probably less than monthly even), you need to ring the register every time you hit resistance and are in the money!

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Fri, Dec 16, 2011 - 4:55pm
padme
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Mongolian music

1. Horsehead fiddle (Morin khuur)

My favorite: https://www(dot)youtube(dot)com/watch?v=3kCA7eKETfk

More: https://bbs.wenxuecity.com/music/622060.html

About the instrument: http://en.wikipedia.org/wiki/Morin_khuur

2. Mongolian song: Mama in the dream

This beautiful boy shocked China in china's got talent, his parents die in two separate accidents. He says he sings this song when he missed his mom.

https://www(dot)youtube(dot)com/watch?v=QW0o9mKf-jY

Nice weekend.

Fri, Dec 16, 2011 - 5:17pm
Empiricus
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Armstrong

Armstrong is no tool of the establishment. Ignore his observations at your peril.

The European crisis may very well result in full scale liquidation of gold from European banks and nations; I think we are seeing the beginning of this currently. If we think this will not have an effect on price, we are fooling ourselves.

I have gone from being net neutral in PM to very short. On this bounce today, I am even more short.

The very events that will drive physical price high will result in full scale destruction of paper markets. Long paper PM is perhaps the most dangerous trade in existence.

I trade on a more intermediate term than most here, so take this for what it is worth.

Thanks to everybody on the board for their insights. Diversity of thought is our strength.

Fri, Dec 16, 2011 - 5:36pm
redwood
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Agree fundamentally with

Agree fundamentally with Empiricus. Somebody on main street cited Richard Russell who is urging everyone to abandon stocks. He gave the same warning in 2008, despite at least one person ridiculing him on Sept.12/08, yeah the day before the financial world hit the wall. That doesn't mean that everybody should jump ship today! It's not a hysterical warning....it is a call for utmost prudency. Trade, but do it quickly, wisely, expertly. In other words for experienced traders only and more importantly for only those that can afford the losses (whatever that means).

Fri, Dec 16, 2011 - 5:39pm
redwood
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For what it's worth (and

For what it's worth (and please if people want me to shut up please say so, I won't be offended) I think Monday will be down, followed by turnaround ( a little bit) Tuesday.

Fri, Dec 16, 2011 - 6:16pm
redwood
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Here's one of the reasons I

Here's one of the reasons I think it might be quieter next Monday. Not because I think the news explains the market, but because the news is prepared and delivered to control the market. An important difference.

https://www.google.com/hostednews/afp/article/ALeqM5iiLxsvg-FkBqSD92jhXJ...

"LONDON — European stocks closed lower in subdued trade Friday, under pressure from gloomy forecasts for the French economy while the euro was firmer as trade quietened before the long Christmas break.

Dealers said a warning from the French statistics institute that the country was likely to be in recession through to the first quarter of 2012 dampened sentiment even if it was not unexpected.

They said investors were nervous too about a possible eurozone ratings downgrade, with both Moody's and Standard and Poor's having warned the bloc is being looked at closely after a disappointing EU summit last week."

Fri, Dec 16, 2011 - 6:40pm
searcher-wamh
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Armstrong Part II

Armstrong's numbers have been out for a long time--he's not trying to manipulate anything (at least in the short run).

Armstrong is certainly not a tool of the banker/government cabal--he credits them for putting him behind bars when he refused to go along with their market manipulations. He hates them and wants to destroy them. Further, he's got plenty of money so that's not his angle.

On the other hand, he does give advice to some very large SW funds (think Arabs), and these funds can and do move markets (indeed, that was one of the allegations that they used to put him behind bars). If he's giving advice to these clients to stay out of gold, they will do so. Moreover, his following in the trader community is enormous, and those guys control a lot of wealth too.

I'm not saying I'm a believer, but since gold closed below 1605 this week, I will not be a bit surprised if we approach 1400 by year end. At the very least, his words virtually guarantee that Gold is not going to bounce big before the end of the year, because of his huge trader and SW fund following.

Searcher All flesh is as grass, and all the glory of man as the flower of the grass. The grass withers, and its flower falls away, but the word of the LORD (Yahweh) endures forever. 1 Pet. 1:22-25
Fri, Dec 16, 2011 - 7:53pm
SilverWealth
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Granny

Granny read some of Armstrong this afternoon and of course got scared. She sold some gold and silver and miners at very small profit to remain neutral.

I follow goldandoilguy and he remains bearish on the market. I read lots of people but this fellow has a very practical take on day to day market action and I am learning from him.

The fact that Armstrong advises other traders does bear some weight perhaps.

Turnaround Tuesday approachs and the market is short term oversold. If Monday is flat or down it will make for a good setup and one day trade.

Sadly, predicting anything out beyond a day or two feels more and more crazy. Some have described Gold and metal as the most difficult of all to trade and I have never in my life read so many 'theories' day to day on why this and why that. Its nuts basically. It is certifiable. Its mostly noise. There are new reasons given each week as to why price moves the way it does and if you count the variables you know that it creates a sheer quantum mess that is nearly untradeable out in time. And the 'experts' almost all have their pet esoteric attitudes and theories. The more variables effecting price the more confusion and the less dependability. Simply compare trading metal to trading Goog. Goog is a whole lot less complicated. So is AAPL. With those you have very successful companies, earnings reporting season, the S&P and the dollar. Thats it. Now compare that to Gold.

Its like comparing flag football to the UFC. In fact if metals do take a dive I will be out of the sector entirely, buying only bullion and daytrading Goog or AApl. Good luck trying to position trade a bear market in commodities.