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I could put on this bio my education, work experience, investment strategy, and a nice thin (if I can find one) picture of me in a suit looking *smart*. Sorry but that's not my intent here. Sure I invest, help family make financial decisions, and make a ton of mistakes along the way. But my time... More
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Interesting Times For All Commodities And Investments!! CHAPTER 4......
  • Interesting Times For All Commodities And Investments!! Chapter 3....  148 comments
    May 31, 2013 12:27 AM | about stocks: LYSCF, PSEC, PSLV, REMX, SLV, KKD, MUX, GGN, GNT, RAD, GDXJ, LMNX, NEM, ABX, AMZN, XOM, GE, IBM, EMR, ORCL, QCOM, CSCO

    Where do commodities go from here, are stocks and bonds still sound investments? Oil. Etf's Physical metals..

    Folks.. we are growing and posters like it. If you are new to investing then this site is for you.

    I am going to be the first one to admit that I haven't a clue when or if Gold and Silver will ever take off in price. I expect they will though. Additionally I don't see much coverage or articles pertaining to the other commodities. So I would like to start up a blog where every commodity, and every investment is on the table for discussion. Even political questions. I only ask that you be courteous!!

    Someone posted the difference between being smart, foolish, and a moron. Well I have been all of the above and I will "man up" and admit it! However I came away from those experiences with both battle scars and knowledge.

    For years I have been reading basically any day now Gold and Silver will explode. Yet somehow the can gets kicked down the road and I live to learn another lesson. Then Sprott's ETF'S are talked about as being safer then others. (PSLV) is the silver ETF.

    With all the QE'S basically not creating any new jobs what will be the consequences in the future?. Will we be "CYPRUSED "?, are we in a serious stock market bubble? Obviously we read daily about these concerns but what about other commodities? Here is where most of us are uninformed and relish an education.

    Stocks are fine to discuss as well. All of us know that commodities should only be a % of your portfolio. I owned (PSEC) and liked the dividend. Others may not ! So please feel free to entertain your picks and why!

    REE'S have been an interest for a few of us over the last couple of years. I had exposure to Lynas (OTCPK:LYSCF). Some posters might have questions about this group as well.

    If you disagree with a post please bring proof and display your argument. If you agree with a post, find one interesting, or have questions please feel free to respond. We must remember were all in this together. So if you want to talk (GLD) or (SLV) that is fine.

    Now if some have an opinion on Copper, Zinc, Palladium, etc. Do not hesitate to post that. Most of us might not understand the post but I am sure well be open to learning. Lumber might interest someone and I would like to learn why I should invest in it. PLEASE bracket any symbol you use so that I can include that in the topic forum. It also allows a reader to click on it and get some data as well.

    My part time job is a college and high school official so I can sit here and referee all day long. I honestly hope that ALL will be professional with their comments. So lets see who comes on board. Looking forward to what can become a nicely knit group of diversified investors.

    I have invited a few Authors whose work I admire to bring their expertise to the forum here as well. Tom, Eric, Hebba, Doug, Chris, Focal Point, Tack, to name a few in no particular order. I am sure they will drop in once in a while to voice their opinions. Please feel free to ask your favorite Authors to join in the discussion as well.

    These are highly recommended people that I suggest you follow as well. I have learned a ton from them and find their work both challenging and engaging. Two areas that I hope inspire people who normally don't post to now feel free to do so !!

    Now I also feel compelled to encourage the use of the like button. It is human nature that once someone posts and see the like button add up they will feel they made a valid point. Upon that feeling they will post again! So if you do like what someone posted, either a question or an answer PLEASE use it ! It might help our core grow exponentially as well.

    As you see I have stopped adding any new symbols as they were growing way too fast for me to keep up !!

    We are living in some very INTERESTING TIMES !!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Comments (148)
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  • Author’s reply » Keep up the good work folks!!!


    Where are the gems were all looking for?
    31 May 2013, 12:28 AM Reply Like
  • IT,


    You asked for opinions on possibility of 10% correction..
    Most can see that latest action has been sloppy , subtle signs in price action show a reversal in trend may be starting..
    I have maintained that pullbacks will be shallow, however more and more seem to be in that camp. My feeling now is that we will get that pullback and it may be a lot more than what the consensus is stating..
    Given how this market has behaved YTD, a 10% correction will feel like Armageddon. But it cant be ruled out..
    I have been very defensive lately , July -August may just be the time for a pullback , there may be some money managers still chasing in June to make their 2nd quarter numbers..


    My .02 , and of course subject to change by 4:00 today :)
    Happy Investing..
    31 May 2013, 09:26 AM Reply Like
  • Maybe next Tuesday will break the string?
    31 May 2013, 09:29 AM Reply Like
  • What's next Tuesday?


    Isn't unemployment released data a big deal -- because BB said they'd consider adjusting down QE if indicators are good & this is a prime indicator in their mandate. So whether or not QE has anything to do with stocks, the perceived notion is heavily that it does. So low unemployment can cause worry for the market & high cause vice versa?


    Thanks F&G, I just checked & date is indeed Fri Jun. 07, 2013 08:30 AM on the BLS site.


    If you have a moment sometime what subtle signs?
    "subtle signs in price action show a reversal in trend may be starting"
    I can see one obvious that everything is moving more sideways.
    31 May 2013, 12:15 PM Reply Like
  • Tuesdays have been up days for the last 20 something Tuesdays. I was commenting on Fears comment about the new quarter and next Tuesday is the first Tuesday of that quarter.
    31 May 2013, 12:27 PM Reply Like
  • Ahh...I remember seeing that Tuesday comment as market soared last Tues. Maybe next Tues?


    Sooner or later it will pop up a bit more, before major correction happens (barring an international event that pushs down). I'm already out though so I'm just waiting, & looking for good shorter term trades.
    31 May 2013, 12:43 PM Reply Like
  • Author’s reply » @FEAR


    So what is your thought process telling you for the rest of this calendar year for the DOW and the S&P ?
    31 May 2013, 12:44 PM Reply Like
  • Curls,
    The first sign was that reversal day wed 5/22, when S & P traded to 1687 then reversed and closed lower that day.
    A little more weakness in the last half hour of trading on a certain days, and a few days have also seen a lower open and buying didn't come back as quickly as I have seen in rally. Some individual names I own or follow seem a little tired. Maybe I'm reading more into this then there is as the S & P & Russell 2000 remain above their 20 day MA, so the trend is still intact. All of what I referred to may just be rotation between sectors and stock regrouping for more upside. But it never hurts to be cautious , nobody has ever witnessed a run like this..
    If the market does regroup here and the S & P can get above the 1675 level or so , we may just go higher.. Conversely if we fail on a few attempts here , that may be the start of a pullback. That seems to be everyone's pivot point.... My .02 and food for thought..
    Happy investing 
    31 May 2013, 12:44 PM Reply Like
  • Author’s reply » @BD4


    That is explosive info you just threw out like it was nothing. Any particular way to trade that info? ETF'S etc..


    Teach us what you might have done, or if the FA'S here have ideas please spread it around for us .


    31 May 2013, 12:45 PM Reply Like
  • Chines33 Posted this awhile back... I sold Tuesday seemed to work out considering the rest of the week. What I found curious is 2009 it changed from Wednesday. It would be interesting to find out why.
    31 May 2013, 01:09 PM Reply Like
  • IT,


    As of right now I'm maintaining the theme of correction, then rebound to new highs at end of year for both the Dow & S & P. Which is where I have been for a while now. The duration of this rally has surpassed my expectations , so now trying to pick exact timing will depend on the first step , the anticipated correction..


    Lots of "What if's" out there , it will be interesting.
    31 May 2013, 01:47 PM Reply Like
  • "A little more weakness in the last half hour of trading on a certain days, and a few days have also seen a lower open and buying didn't come back as quickly as I have seen in rally. Some individual names I own or follow seem a little tired. "


    Yes, I've noticed those things. I didn't know if they meant anything. You can see a push up during the active day... then a taking of profits later in the day. It's not longer the wild rides up that just spike up at the ends of the days with no explanation in site.


    My IBM is soaring & I can't figure out why (I sold for profits yesterday). But it's lower at the start & end of the day... like it's being used as a secure place for trading.


    "reversal day"
    That's referring to the "claw" around things, that I've read a little about, I assume.


    I saw a chart with a 200 day MA 2 days ago, that wasn't looking intact. I couldn't remember if shorter or longer day MAs mattered more.


    With sectors, there seems to be some moving away from more stable sectors, like utilities? Meaning, folks are getting more risk taking & rally-happy...


    "nobody has ever witnessed a run like this"


    I suspect, that's a key statement that isn't said very often.


    Thanks so much for putting your thoughts out here. It really helps to hear them... to help sort out the bits & pieces of signals... (so I can learn :) ! )
    31 May 2013, 02:48 PM Reply Like
  • Looks like your a quick learner. Just my opinion but Tuesdays AM 's seem best to sell. It's worth watching anyway. Good luck
    31 May 2013, 02:52 PM Reply Like
  • Fear&Greedtrader:


    The S&P is right on its 30 days MA right now. Next week will be very intesresting. As you say, if we fail in getting over the 1675 level we will have a consolidation period or a full blown correction.


    People seems so sure about a correction that I would go with a consolidation. But sentiment is high so odds seem to indicate a correction.


    Never easy to time the market. Mid-long term investing is a lot easier.




    31 May 2013, 06:00 PM Reply Like
  • Interesting timing. I've been thinking those early morning spikes are good for day trading.
    1 Jun 2013, 08:45 PM Reply Like
  • Add: Of course I forgot to mention the most obvious signal of a possible reversal trend (based on my many years of non-experience)...


    ....the market went down after the Fed hearing, & didn't climb back up past that point. It's climbed but a happy market ready to bull would have pushed back up past pretty quickly. It might even come down & correct after that... but that lack of pushing back up again right away seems like an indicator to me of a possible reversal.
    1 Jun 2013, 08:52 PM Reply Like
  • I'm thinking June 10th is a key date when the unemployment numbers come in. (Do I have the right date?)


    Money Magz had a blurb on lumber a couple months ago. With housing recovering & it being a relatively renewable resource, they will positive on it. It was a pretty convincing blurb.
    31 May 2013, 01:05 AM Reply Like
  • Curls,
    Take a look at Eric Parnell's latest article here on SA- talks about lumber


    I believe unemployment # is next fri 6/7
    31 May 2013, 09:05 AM Reply Like
  • Author’s reply » @CURLS


    Has this blog been helpful for you?
    31 May 2013, 01:20 AM Reply Like
  • Goldman predicts higher rates What will happen if rates go up?
    31 May 2013, 06:12 AM Reply Like
  • A 10% correction would bring the sentiment back to an acceptable level and it would scare people so we make sure there are plenty of bears out there when the markets resume their uptrend.


    We are, however, a little ahead of ourselves as we may have to wait until July until the anticipated correction materializes itself.




    31 May 2013, 10:24 AM Reply Like
  • Author’s reply » I was talking about a 10% correction by years end, not July. So do you see that as a possibility..??


    If interest rates do rise my opinion is we DO get the correction. Now am I wrong on that assumption?


    Plus, I am assuming that the PM'S would also rise in price in an increased interest rate environment, am I wrong?
    31 May 2013, 11:36 AM Reply Like
  • Interesting Times:


    I meant that we may have to wait until July until a correction starts.


    If interest rates rise because of the economic expansion stocks would very unlikely crash.


    PMs tend to go down in a ''positive'' interest rate environment. Yes they could rise but would likely crash the day interest rates will jump over the rate of inflation.




    31 May 2013, 12:36 PM Reply Like
  • krustyman,


    Your comment yesterday on KKD was sure timely, up 16% today.
    Whats up with that, something new going on with them?


    Next time give us a couple days notice before that happens :)
    31 May 2013, 12:59 PM Reply Like
  • I know... it was late evening when I saw his comment, so too late to buy or judge. At opening bell, it'd jumped.


    Great call - Krustyman! Please do feel free to post your finds :).


    @Tampat - in general their sales improved, & a report was just released. Possibly it's the coffee, not donuts that are pulling up the sales numbers. (That's as far as I got on research.)
    31 May 2013, 01:22 PM Reply Like
  • Hi Tampat:


    Well, the same store sales seem to indicate that the company is back on track for good.


    They have a good product and a strong brand, so they should do well if management stays disciplined.


    You may want to consider RAD, which could be the biggest turnaround story of 2013. Their price to sale ratio is around 0.10 while the competitors sell for 0.65. If RAD executes well, we could see something around 0.40 IMHO which would equate to a $10 stock within the next 2 years.


    Disclosure: I have RAD as well.




    31 May 2013, 02:03 PM Reply Like
  • curls-100:


    You are correct, most likely their coffee. But we cannot ignore their donuts for sure!


    In addition to RAD you may want to have a look at LMNX.


    LMNX is, however, strictly from a trader's point of view.




    31 May 2013, 02:06 PM Reply Like
  • Author’s reply » @KRUSTY


    You want to manage my trading account for me? I can handle those short term profits as well as sit on my hands for a couple of years as well.




    Great planning and explanation where you think we will be at years end. I am not a chart reader , so I do listen and try to learn.




    Seems like you are eating all this information up quickly, soon you will be recommending symbols for us as well.


    Great work folks, ideas are spreading without the arguments you get in Articles and were covering different areas as well. Everyone who leaves early on Fridays enjoy your weekend!


    I will be around watching this chat most of the weekend. Have Condo work to do as Treasurer. Like sitting at the pool !!!
    31 May 2013, 02:13 PM Reply Like
  • Interesting Times:


    lol! ;-)
    31 May 2013, 02:18 PM Reply Like
  • Author’s reply » @KRUSTY


    But I pay in pennies ( he is from Canada)..
    31 May 2013, 02:23 PM Reply Like
  • Eheheh! :-)
    31 May 2013, 02:24 PM Reply Like
  • I liked that one too
    31 May 2013, 02:29 PM Reply Like
  • I remember the days when we'd use the Canadian nickels in soda machines since stores wouldn't take them. (I lived far enough north to have a stead supply of Canadian coins.)


    Never did find a use for the pennies... but they seem to work well in wishing wells...!
    31 May 2013, 02:50 PM Reply Like
  • :-)
    31 May 2013, 05:01 PM Reply Like
  • Author’s reply » American pennies do cost 2 cents to make though.. Just sayin..


    A nickel cost 11 cents !!
    31 May 2013, 05:03 PM Reply Like
  • Here is an interesting link you might want to bookmark ...
    31 May 2013, 06:52 PM Reply Like
  • krusty,


    I love those donuts!!


    I put RAD on my watch list yesterday when I saw you mention it, as well as LMNX. It appears both may consolidate or fall back here so am looking for a lower entry price.


    I appreciate you mentioning them as I do a little short term trading and am always keeping my eyes open for oppty's.
    Bought put options on (TSLA) today and was pleased to see the fall, still holding as it appears to have more downside.
    May be a great car but to me that stock seems to have run too far too fast.


    One I keep an eye on is (MDBX) for short term trading only. It makes big moves from time to time, if you can catch it at the right time it can be a nice short term trade.
    31 May 2013, 06:53 PM Reply Like
  • Author’s reply » @BD4


    Use that one all the time for the calculator !! Glad you posted it !!
    31 May 2013, 07:02 PM Reply Like
  • Author’s reply » @TAMPAT


    Is (MDBX ) the correct symbol??
    31 May 2013, 07:04 PM Reply Like
  • Author’s reply » It is a symbol , not sure why it does not show up blue nor can you click on it..I am just posting (PSEC) to see if it shows up in blue.


    ( MDBX ) Huh, still doesn't show up in blue. Wonder why?
    31 May 2013, 07:07 PM Reply Like
  • Glad you liked it hint hint nudge nudge
    31 May 2013, 07:13 PM Reply Like
  • Author’s reply » I *liked* it . Got the hint. lol


    In fact I believe I *LIKED* all the post so far.
    31 May 2013, 07:35 PM Reply Like
  • Tampat:


    In complete agreement with you regarding (TSLA). I missed that one...grrrr.


    31 May 2013, 09:19 PM Reply Like
  • krusty


    Thank you for the information on RAD; I bought RAD a month ago together with CHUY; I I still have RAD which I intend to keep for the long term but I got out of CHUY; any opinions on CHUY?
    31 May 2013, 09:43 PM Reply Like
  • Rinascimento:


    I don't know that company but technically speaking CHUY appears to be ready for its next upleg. A short-term move towards $40 at least.


    The general market condition is the key here IMHO but it seems ready to gain a quick 10%.


    31 May 2013, 09:48 PM Reply Like
  • (MDBX.PK) :)
    1 Jun 2013, 02:38 AM Reply Like
  • krusty


    thank you; it figures after I sold it but I will keep an eye
    1 Jun 2013, 08:49 PM Reply Like
  • Author’s reply » Folks


    Maybe I am off base here asking this . But I have tried to post as much as I can the use of the LIKE button. Let me explain why.


    I belonged to another chatroom blog for a year and if you just posted OK it got close to 10 likes. Now the reason for this is that when we all post and EVERYONE takes a minute to hit the LIKE button when someone looks at you profile they will eventually see more likes then comments.


    That leads them to potentially following you, which can lead to Authors getting better responses on their articles, other posters joining us, validity that we are forming a group that will stay together for years hopefully. etc,


    Take a look at DOUBLE GUNS comments and likes, TRIPLEBALCK as well. FOCAL POINT too. Those three were part of a core group that I broke in on years ago on SA. THE MORE LIKES YOU GET, THE MORE YOU MAY WANT TO POST.


    Best part is they are free!! It is up to each individual but when I open up my blog I hit like on EVERYONE. Hoping it helps you out in the future as you build up posts, feel your knowledge is being appreciated, and hope it keeps you here and entices others to join in.


    Just my experience as to how this LIKE button can do wonders, it only takes a few minutes but also forces you to look at past comments and MAYBE you might want to respond to it.


    Anyway my 2 cents,,, If you don't agree then please feel free to not hit the button. I just wanted to take the time to explain why I hope people utilize it , that's all.
    31 May 2013, 11:53 AM Reply Like
  • And with that... I hit the like button on your comment.
    31 May 2013, 12:02 PM Reply Like
  • I liked your comment.
    31 May 2013, 12:28 PM Reply Like
  • Ditto! ;-)
    31 May 2013, 12:37 PM Reply Like
  • Author’s reply » Folks, Thanks but I am more concerned with you guys LIKING each other.. I will take them as well of


    But some are Authors here so it can help them. Some new posters will build up confidence in learning . Just like I learned about every Tuesday being an UP day ! What trading knowledge that just spread around huh?


    Now that is what I am looking for ! Gonna LIKE everyone I can right now in fact !!
    31 May 2013, 12:41 PM Reply Like
  • IT,
    My thoughts were that we would see a correction in the July - Aug timeframe , yes I do believe it may be around 10% , that would be normal , but who knows..


    What triggers the pulback is anyone's guess, simple profit taking by the big boys is all we need. As always there will be the media types that will "fit" the story of the day/week to the price action..


    The utilities , defensives are correcting now, but they had huge runs , so one has to factor that into the picture . Not all attributable to the recent rate rise.
    31 May 2013, 11:58 AM Reply Like
  • General comment:


    I am liking this blog a lot! People are respectful and the ideas are very interesting.


    Keep up the good work!


    31 May 2013, 02:09 PM Reply Like
  • Author’s reply » @KRUSTY


    You already calling for a group hug??


    I love it !! Even though I am not a day trader this info already passed around is priceless. Too bad so many people are missing out on it!


    Thanks for the compliment but it belongs to all of you who make it possible.. I thank you all !!
    31 May 2013, 02:31 PM Reply Like
  • Agree about the ideas, thoughts, comments and interests that are on display here ......all respectful, informative and timely..
    31 May 2013, 03:05 PM Reply Like
  • Interesting Times:


    I consider myself more an investor than a trader but sometimes, yes, I take a position for only a day or two. The biggest profits, always come from investments, though.




    31 May 2013, 05:09 PM Reply Like
  • Yeah, what he said.
    31 May 2013, 07:00 PM Reply Like
  • Author’s reply » @KRUSTY


    I agree with you and when I do invest I try to stick with dividend plays only.


    Wonder what FEAR and DOUG feels about this?


    I can be completely wrong but I am waiting for a decent pullback before I get out of dry powder. Right now I am only in (PSEC).


    BTW ..When anyone post a symbol consider bracketing it like I did so that people can click on it for information and I also can include it in the next blog as an item discussed !


    31 May 2013, 05:42 PM Reply Like
  • IT,


    Dividend players make up about 75% of my holdings at the moment.


    My overriding goal is income , I really embraced that investment style for myself about 3 years ago.


    IMHO, Everyone has different needs, objectives , risk tolerance and therefore should go with what makes them comfortable..


    I share your approach on waiting for a pullback before nibbling away here.. 


    Thanks for the bracketing tip , I didn't know that !


    31 May 2013, 06:01 PM Reply Like
  • IT,


    Congrats on the instablog start up here, good job!
    31 May 2013, 07:02 PM Reply Like
  • Author’s reply » @TAMPAT


    Thanks, but it is you posters making it work.!! Just spread the link in other articles you read and tell them how much info they are missing out on. That will help our core group build up !
    2 Jun 2013, 11:30 AM Reply Like
  • What ever it's worth I have my assets into 3 groups...
    1) mutual funds - Vanguard index funds - Emerging Markets - Developed Markets - Conservative growth it's kind of a asset allocation fund stock bond mix.
    2) Hard assets - gold, silver, platinum, palladium funds with sprott plus Sprott Resource Corp. SCPZF and GDXJ.
    3) Speculation - Mix of penny stocks, telecommunication, alternative energy, energy shipping.
    1 and 2 I have been leaving alone and dump any profits from 3 into 1 and 2. I have a 5 to 10 year time horizon.
    31 May 2013, 07:03 PM Reply Like
  • Author’s reply » @BDU


    Friday, May 31, 4:16 PM ET
    It looks like Treasury yields finally got high enough to trigger a big rotation out of stocks and into fixed-income. Something seemed to snap when the 10-year rose to 2.20% this afternoon - the resulting action saw money pour out of equities (SPY -1.4%) and into Treasurys (TLT -0.3%), with the 10-year yield falling back to close at 2.14%.


    Any thoughts on this? Are higher rates coming??
    31 May 2013, 08:00 PM Reply Like
  • Sorry nothing yet I was on the road driving then. I'll have to read up on what happened. The bond market correction has potential to be worse then 2008 IMO. Maybe PM's will return to safe haven status?
    31 May 2013, 09:44 PM Reply Like
  • @ Bd4uandu


    My thoughts are the bond correction will be much more than what we've seen so far, as rates eventually continue to increase. What do you think?


    @ Everyone
    Here's a dumb question. What makes treasury & bond rates increase?
    2 Jun 2013, 12:42 PM Reply Like
  • Rates have been so artificially low for so long that the market and whole business environment is distorted. A rise in rates will be a rude awaking for many business plans.
    2 Jun 2013, 02:42 PM Reply Like
  • Good point about rate increase really will effect businesses...
    3 Jun 2013, 01:40 AM Reply Like
  • Anyone else listing to the 2009 interview of Bernake on CNBC happening right now?


    Then they're talking about making coins.
    31 May 2013, 09:28 PM Reply Like
  • Author’s reply » CURLS


    Thanks, gonna catch the last 20 minutes !!
    31 May 2013, 09:37 PM Reply Like
  • Does an IPO in June for Noodles & Co. provide an opportunity? How do you take advantage of it?



    The article says some of the IPO money will be used to pay debt & provide working capital.
    31 May 2013, 10:25 PM Reply Like
  • Author’s reply » Folks, I am not taking credit for what is posted below. STU SILVER posted it on another article. I just felt it was important for those new to PM'S, those who are both pro and con as well. Please comment on this from all angles !


    "We knew that this week's CoT was going to be interesting but I didn't expect it to leave me speechless.


    Look, I know I've been banging this drum for months and all the metals have done is go down. Got it. I read you loud and clear. But we're talking big picture, positioning stuff here. I am 100% firm in my belief that QE∞ caught the bullion banks with their pants down. All of the price action since 9/13/12 has been designed to alleviate the gigantic financial risk and potential liability of being short paper metal. By smashing price, against the fundamentals, from $1800 to $1350 and from $35 to $22, The Cartel Banks have accomplished two things:


    They've been able to transfer the vast majority of their potential liability from themselves to the speculator sector (hedge funds, managed money, small investors).
    And now, instead of being trapped short, they are a in position to profit from the inevitable explosion in price.
    Even though it's blatantly criminal, you almost have to give them credit. That they've been able to pull this off in broad daylight is simply astounding. On the level of Oceans 11.


    Once again and with meaning: On 9/11/12, two days before the announcement of QE∞ and with gold already at $1800, The Gold Cartel was net short 237,091 Comex contracts. That's 23,709,100 paper troy ounces or about 737 metric tonnes of gold. As of last Tuesday, they are now net short just 59,221 contracts or about 184 metric tonnes. A reduction of just over 75%! Oh, and did I mention that, over the same time period, the GLD has been raided for 277 metric tonnes? Just thought I'd throw that in, too. Simply magnificent! The Crime of The Century! Ah, screw that. That's The Crime of The 20th Century, too!! Amazing.


    So, here are your numbers. Keep in mind that, for the reporting week, gold was up $1.30 while total open interest fell ahead of June13 expiration by 35,086 contracts. Also keep on mind that for Wednesday and Thursday of this week, total OI fell another 25,110 contracts. One can only imagine how much more long-term bullish these levels are as of this weekend.




    For the week, the Large Specs dumped 16,836 longs and added 6,544 new shorts (quite a few of which got squeezed yesterday and put back on today). This brings the Large Spec net long total down to just 56,879 contracts. Do you think that's a lot? Hmmm. What if I told you that, back on 9/11/12, the Large Specs were net long 182,016? From a different perspective, back on 9/11/12, the Large Spec net long ratio was 6.62:1. As of last Tuesday, it was down to1.49:1. And here's a little more perspective for you: At the price lows on 12/27/2011, the Large Specs were net long 130,788 with a ratio of 4.57:1 and at the price lows of last August they were net long 114,304 with a ratio of 3.43:1. Again, as of last Tuesday, the Large Specs were net long just 56,879 contracts and had a net long ratio of 1.49:1.


    The Small Specs also reduced their net long position by a little over 1500 contracts and they are now net long just 2,342 total contracts. Again, by contrast, back on 9/11/12 the Small Specs were net long 55,075. That's a reduction of nearly 96%!


    And The Gold Cartel. What did they accomplish this week? Not much...No, they just reduced their net short exposure by nearly 25,000 contracts! Again and as stated above, The Gold Cartel is now net short just 59,221 contracts or 184 metric tonnes of paper gold. Back on 9/11/12, they were net short 237,091 contracts or 737 metric tonnes of paper gold. The new Cartel net short ratio is just 1.34:1. This means that they are now long 3 contracts for every four that they are short. Incredible!


    Once again for perspective, at the most recent price bottoms near $1525 in Dec of 2011 and August of 2012, The Gold Cartel was still net short 163,932 and 143,940, respectively. Their net short ratios on those occasions were 2.01:1 and 1.98:1. Again, as of last Tuesday, the numbers are 59,221 and 1.34:1.




    While interesting, the silver CoT isn't nearly as wild as gold. It's still crazy, though, as you'll see. For the reporting week, silver was down about 25¢ and its OI fell by about 3,300.


    The Silver Large Specs dumped another 1,474 contracts this week while adding another 2,750 longs. That net long reduction leaves them net long just a little over 4,500 contracts and drops their net long ratio down to an almost inconceivable 1.16:1. Again, consider these levels and dates for perspective:


    On 9/11/12, they were net long 31,482 contracts and had a net long ratio of 4.18:1.
    At the 12/27/11 price bottom, they were net long 6,855 with a ratio of 1.40:1
    At the 8/14/12 price bottom, they were net long 15,407 with a ratio of 1.93:1.
    The Small Specs in silver had little change and are of little consequence right now.


    The silver commercials continue to astound. Though the everybody-but-JPM crowd sold 1,326 longs last week, they're still gross long an amazing 66,428 contracts. All of this commercial and spec selling allowed JPM and The Forces of Darkness to cover 4,918 shorts, leaving them gross short just 74,762. This commercial net short reduction of nearly 3,600 contracts leaves them net short just 8,334 contracts and an incredibly, nearly-impossibly low net short ratio of just 1.13:1. Again, for perspective:


    Caught with their pants down on 9/11/12, The Forces of Evil were net short 47,272 contracts or 236,360,00 troy ounces of paper silver or about 7,350 metric tonnes. They also had a net short ratio of 2.47:1.
    As of last Tuesday, The Evil Ones were net short 8,334 contracts or 41,670,000 ounces. That's 1,297 metric tonnes or a reduction of over 83%!
    At the $26 price low of 12/27/11, they were net short 14,312 contracts with a net short ratio of 1.34:1
    And at the price low of 8/14/12, they were net short 23,402 with a ratio of 1.49:1
    Again, as of last Tuesday, they are net short just 8,334 contracts with a ratio of 1.13:1
    Look, I could probably keep typing for hours about the significance of all of this but I think I'll stop here. All you need to know is this: The Bullion Banks have now reduced their net liability in gold by over 75% and, in silver, by over 83%...all since the game-changing announcement of QE∞ last September. Rather than once again trying to cover into rising prices with disastrous results (see April of 2011 in silver and August of 2011 in gold), an evil, insidious and outright criminal plan was made and executed to crush the paper price of both metals. By flawlessly executing this plan, The Bullion Banks have so reduced their potential liability that there can be no doubt that prices will soon be allowed to rise again. When? That's impossible to say, of course. Maybe not until The BBs are net long both gold and silver. Who's to say for certain? But I do know that we are very, very close to a price bottom here when you take this CoT situation and the physical market demand into consideration. Plain and simple."


    Some have to have questions on this and I hope the Financial Advisors here, The Authors here, and most important you posters here comment and break this down for the newbies and for me as well !!


    Now back to my Treasury functions for our condo board. "Please pass the suntan lotion??"
    1 Jun 2013, 12:45 PM Reply Like
  • Author’s reply » This post is from a person's opinion I value. It is TACK and I am sure you folks have come across his posts as well. He was gracious enough to give us his overview of some areas discussed here.


    "OK, I have taken a quick perusal of your blogs, so allow me to provide a couple quick reactions:


    First, I am so active on SA, along with other real-life investment and personal obligations, that I don't really have time to add these blogs, per se, to my routine reads and posts. I am adding you to my follow list, and if I have something to say that i think merits my comment, I'll offer it on an unscheduled basis.


    Second, regarding commodities:


    Gold, silver - loathe both. Don't follow them. Think they are not investments, but simply fear-based trading vehicles. Over longer period, equities crush metals for performance. I'd rather gamble in Las Vegas, and I don't even like Vegas.


    Energy - an pro energy and always like undervalued energy plays with good yields. I don't invest in MLP's because they are very hard to value and can have breathtaking declines if reserves miscalculated. But, like oil and gas common and preferreds.


    Copper - Copper is the one metal I follow because it has real use in the economy and when it gets depressed, I consider buying it via producers, if the yields are satisfactory. (I don't like any equities without good yields, as they are a fundamental underpinning to my investment strategy, as a "high-yield value investor.")


    Minerals & Chemicals - I usually hold these through various ETF's


    Realty - I am bullish on global real estate and also hold positions via various global realty ETF's. I don't buy homebuilders, at least not any more at these prices.


    If you don't already, i'd suggest you follow me and/or persue my past commentary, where you can readily get a feel for how I view the economy, markets and investment strategy.


    I hope this suffices, for starters. Always happy to answer direct inquiries, as I am able.


    Have a nice weekend."


    Let's add this to the discussions as well..
    1 Jun 2013, 01:49 PM Reply Like
  • I share a lot of Tack's thoughts on the markets. As stated, whether in agreement or not he makes a compelling case for his argument on a variety of topics. He is a well respected part of the SA community.
    1 Jun 2013, 03:38 PM Reply Like
  • Author’s reply » @FEAR


    Here is his response to my question as to where he see's us heading. I found it interesting !


    " Tack Comments (9292) IT:


    We live in the age of hysteria. This is just another episode.


    We've lived through several years of being told by many here in SA that QE was/is terrible, "robbing" savers of gains, "stealing" from future generations, threatening unbridled inflation, etc. Now, often the same critics, warn that higher rates will crush the economy and markets, cause the U.S. Government to go bankrupt, etc. Apparently, it's a no-win game, and we might as well all give up and grow our own vegetables.


    Here, in fact, is what's likely to occur. We'll continue the current hysterical reaction to a small upward adjustment in rates, which is provoking aggressive selling, not only in bonds, but in all classes of equities, as well, especially any that are perceived, correctly or not, to be hurt by higher rates. The selling will get overdone (it's already overdone in some commercial REITs and various bond ETF's); then, there will be a rapid snap-back after the latecomers capitulate at the bottom.


    And, throughout this entire knee-jerk behavioral episode, it will subsequently be discovered that the real economy is entirely unaffected. "


    1 Jun 2013, 04:03 PM Reply Like
  • IT,


    I am in agreement here with Tack,
    First let me preface my statements that the utility , defensive sectors & REIT's that are now being sold, were at levels I have not seen. There were utilities that were being valued as if they were good tech growth companies. All because of the chase for yield. Now as we have seen an uptick in rates , we have profit taking and a reversion back to the mean.. As Tack pointed out some of the selling is already overdone (MLP's & REITS ) although I would argue they may take them down a bit more. I will be looking real hard here for good Div. payers that may be thrown out with the bathwater..
    Again as Tack mentions , when the dust settles we will discover that nothing has really changed..


    Lets Go back to Nov '12 when the cry was to sell your div. payers because of the possible and proposed tax changes that were coming in Jan. Well, as we know it was a great opportunity to add to the div. growth plays and in the end nothing really changed.


    What Tack is referring to is the "fear" cycle (using the word hysteria) that plays out and presents opportunities. I try to use that to my advantage.
    1 Jun 2013, 06:36 PM Reply Like
  • Author’s reply » @FEAR


    When the time is right would you feel comfortable throwing out some symbols as what you perceive as good value dividend plays?


    I know I would like to learn and do some research on them..
    1 Jun 2013, 06:44 PM Reply Like
  • IT,
    Absolutely will do , not a problem.
    1 Jun 2013, 07:10 PM Reply Like
  • Tack is one of the best on SA.


    Thanks for posting this, Interesting Times.


    1 Jun 2013, 02:45 PM Reply Like
  • Author’s reply » @KRUSTY


    I may not always agree with him. But he always makes a compelling argument that has sent me back re thinking my position. I hope he does pop in here once in a while to give us his views on specific stocks, ETF'S , bonds, etc..


    Like I have said I want to show all sides of investing so that we can all learn off each other. I know I have a lot to learn. I have been a highly rated high school and college official for over 25 years and I believe every game I learned something new .


    So why should investing be any different? Bottom line is to make money more often then mistakes !!!
    1 Jun 2013, 02:51 PM Reply Like
  • Author’s reply » The 34 Words That May Have Caused Today's Crash In Stocks!


    There is much consternation about what triggered today's rapid escalation of selling pressure in US stocks. As the evening wends on and traders sip their Absinthe, it appears an embargoed record of the Fed's Advisory Panel minutes [2] was at least a major concern as it raised the very real specter that those in charge are concerned at the monster they have created:


    "There is also concern about the possibility of a breakout of inflation, although current inflation risk is not considered unmanageable, and of an unsustainable bubble in equity and fixed-income markets given current prices."


    "Unsustainable bubble"? And this not from some fringe blog but... bankers?


    And some bonus words, which have to be read to be believed:


    Uncertainty exists about how markets will reestablish normal valuations when the Fed withdraws from the market. It will likely be difficult to unwind policy accommodation, and the end of monetary easing may be painful for consumers and businesses. Given the Fed’s balance sheet increase of approximately $2.5 trillion since 2008, the Fed may now be perceived as integral to the housing finance system.


    Uhm... wow. Reported by ZEROHEDGE !!
    1 Jun 2013, 03:27 PM Reply Like
  • Interesting Times:


    The guys at Zerohedge told their readers to be massively short when the SPX was at the 900 level. And the big joke is that they still convey the same message today! I don't want to be rude but instead of Zerohedge I would rather call them Zerocredibility.


    1 Jun 2013, 04:21 PM Reply Like
  • Hum, it's not letting me post this...


    I'd go with Krustyman on this. The report wasn't being mentioned by CNBC or Bloomberg. (Nor Crammer - I've never listened to him before - how does anyone talk that fast? It's faster than I can listen.)


    Minutes of a meeting... means it's someone's comment, not general opinion. So who's & professional traders wouldn't make moves based on high-drama-viewpoint comments of one person at a meeting. The sell off couldn't have been mostly private -- it had to be professionals.


    Also, looking at the day, it's mostly normal till 2pm then goes down a bit. It's a big drop right before close that makes it look bad. If there'd been another 1/2 hour... a climb back up likely would have showed. It was end of the month, so I'd look there for reasons why professionals repositioned... where did they go to & why? (I have no expertise to have a clue.)


    On re-reading the notes... none sounds like much. The first paragraph is are the same worries they've been discussing & assigned to worry about since the beginning. The 2nd paragraph is largely the same - realistic topics to discuss at internal meetings before making a move. Only thing worrisome for me is the "integral with housing market."


    I do think things will be tough to re-adjust (bumpy) when it the re-adjusting starts. There may be much to worry about... but I don't see professionals selling off because of these minutes. It's not like we all didn't know this was the topic of conversation...


    But why the sell off? I have no ideas.
    1 Jun 2013, 04:50 PM Reply Like
  • Author’s reply » @KRUSTY


    I have another person. I know , I know, Peter Schiff reporting the same exact minutes released!



    Might be worth listening to those minutes released late yesterday. I know Zerohedge has it's issues. But I posted it after I heard them from a second source..
    1 Jun 2013, 05:02 PM Reply Like
  • Author’s reply » @CURLS


    Watch the video I posted above. It might answer a few questions you have. The market did sell off 70 points in the last 5 minutes. That is concerning for sure !!
    1 Jun 2013, 05:05 PM Reply Like
  • What time was it released? A rapid down at the last minute doesn't ring concern for me. It says a couple big houses made a move on purpose just before close. What's the game? It's not sudden general panic from many quarters the report unless this report was right before then, IMHO.


    Oh on Schiff, I've learned last week in SA that he's a perpetual bear who's tends to "the roof is falling" extremes. Kass was mentioned as perpetual bear who looks moderate compared to Schiff. I don't know either of their work, but it was one of the SA authors I've found good who said it... for what that's worth.
    1 Jun 2013, 05:10 PM Reply Like
  • Author’s reply » @CURLS


    Do you think CNBC or BLOOMBERG would actually release the minutes during trading hours? Yes, Schiff is a bear, but it doesn't make him wrong as long as he can support his opinions.


    You feel inflation, he talks about inflation, yet our Govt says we don't have any !!


    Watch both videos, and the Abbot and Costello one MIGHT be like one of those FED meetings anyway!!
    1 Jun 2013, 05:19 PM Reply Like
  • Author’s reply » "What time was it released?"


    Very good question. Released for us or released to those insiders??
    1 Jun 2013, 05:21 PM Reply Like
  • Curls,


    Sometimes we often over analyze things , myself included. Its one of my traits and faults that I try to keep in control. Normally I would be right there with you analyzing and reading into every word then trying to make it fit into how the markets reacted.


    While I will also agree with Krusty's word of wisdom, I rationalize the selling this way.. We've had a 15% gain in the S & P YTD, over 25% since last Oct., Markets are stretched , so maybe its just simple profit taking ........and I have further reconciled that its too early to get excited about.. it makes great reporting for the financial networks.. Just my humble .02
    1 Jun 2013, 06:17 PM Reply Like
  • @F&G


    "Normally I would be right there with you analyzing and reading into every word then trying to make it fit into how the markets reacted. "


    Hum, I was saying just the opposite. That there wasn't anything to analyze here. I wonder how I miscommunicated that?


    I was wondering what that last minute sell off was because it's the topic here... but not worried that it means much. Probably just a couple big firms purposely picking end of month end of day to do whatever they needed to.


    I'm with Krusty that if you see good div stocks going down... I'd love to investigate them.




    I was listening to both channels throughout the evening & into night. They weren't referring to the report. CNBC kept talking about rebalancing. ...I don't get FBN, but discovered I get Bloomberg. So based on your comment to me about quality differences.. I was curiously listening to Bloomberg.


    I haven't had a chance to check out the videos yet...


    Overall, I'm still 100% out & doing only day trading & short term watchful trading. I got out right at the peek, so I'm waiting till there's evidence of a rally before getting back in. Right now it feels like it's moving sideways to me.


    On bonds, I know they've moved down, but interest rates have barely moved up. I'm betting they will move down a lot more eventually. I'd rather wait till a big dip & get into div stocks. Especially since my time-horizon based allocation is 85-95% stocks.


    If we are on the downside of the mountain, I haven't figured out how to make money during that yet.
    1 Jun 2013, 07:51 PM Reply Like
  • Author’s reply » @CURLS


    Patience is needed if you are considering a long term trade. You just sold at the high, so don't expect to jump back in unless your playing the trading game.


    FEAR might be able to answer it better then me. But I get the feeling you are already thinking the correction is over. IMO it is just starting and can go on for months before the bottom is hit.


    Just be careful here, This can take a while. I hope others will advise you as well !! I am a long term holder when I am in the market and that thought hasn't even crossed my mind yet.!!


    Now if you are day trading then were talking a different animal ! BTW I think most here will tell you to forget what you hear on TV. That is considered daily noise and most are clueless!
    1 Jun 2013, 08:06 PM Reply Like
  • Interesting Times:


    In 2009 Peter Shiff's mantra was "We are in a secular bear market but would not be surprised to see the Dow go back to the 8,500 level". We were at the 6,800 level. Then his mantra changed a bit for " The rally may have more legs; long-term This is a Bear Market. I would not be surprised to see the Dow get up to 10,000."


    Five years later we are at 15,000 and I realize that the guy did not have a clue of the Dow's durection! :-) Furthermore, his readers were encouraged not to invest in US stocks. That was THE place to be invested.




    1 Jun 2013, 08:33 PM Reply Like
  • @IT


    IT: "But I get the feeling you are already thinking the correction is over."
    ......Nope :). You're projecting a lot more impulsiveness onto me than I remotely have. There hasn't been any correction yet. It's sideways so far.


    IT: "IMO it is just starting and can go on for months before the bottom is hit."
    ......I'm not sure which way we're going. It could turn bull again. Or this could be the downside of the mountain. I've seen convincing arguments & indicators for both.
    Everyone though seems to be looking for a significant correction at this point (2-3 to 10%). The "maybe it will be like '95 without one" seems to have stopped.


    It: "Now if you are day trading then were talking a different animal !
    ......I've made a couple round trip day trades with small success. So since my money isn't doing anything else (like earning dividends)... it was fun.


    It: BTW I think most here will tell you to forget what you hear on TV.
    ......I've heard that around here, probably also from you:). I was curious. Also being me, I can miss major stuff, so having them on, helps. Like I had no idea bonds were going down that other day. They really can get into & mess with your head though, I noticed.
    1 Jun 2013, 08:38 PM Reply Like
  • Curls:


    Odds are pointing toward a correction but a consolidation would take everyone by surprise...again! :-)


    1 Jun 2013, 09:05 PM Reply Like
  • @Krusty - I was pondering in the more longer term. Not sure if there's another bull leg coming after a correction.


    ... Or if we've already entered the real downside where it will keep going down for a while. (To me, in charts of the past, it looks like the other side of a mountain, so that's what I've been calling it.)


    A question: In looking at past crashes (dot-com, '02, '07), there's a pattern with a downside for quite a while. Then a drop of 7-15% in a day. Then more downside for a while. Then the crash first happens. It's a couple years from the peek to the crash itself. My question. Did I see right? Is this a known pattern?
    1 Jun 2013, 09:15 PM Reply Like
  • Curls:


    What do you mean by more longer term?


    I am not sure I correctly understand your post re: longer term and not another bull leg after a correction.


    1 Jun 2013, 09:18 PM Reply Like
  • Author’s reply » @KRUSTY or anyone...


    Could you explain the difference between a correction and a consolidation for me?


    I believe we have some newbies reading along!!


    1 Jun 2013, 09:35 PM Reply Like
  • I likely don't know the right terminology for the ideas I'm talking about.


    I see right now -- sideways (that's called consolidation, right?)
    Next will be either more sideways or down. (The other option of going straight to genuine bull is very unlikely.)


    So for the down that's coming. It can be either a correction. (That's a up to 15% drop that can be in a day or over a few months. Then the bull comes back.)


    Or for the down that's coming, it can be the start of a real firm longer time reversal that looks like you're on the other side of the mountain in the charts. It can go on & on. Investors tend to stay in expecting the upswing to happen but it's a long ride down.


    So my question was: I've noticed the huge crash days happen while already on the other side of the mountain. They don't seem to appear while at the height of the bull out of the blue. Did I see that correctly?
    1 Jun 2013, 09:37 PM Reply Like
  • IT:


    To me a correction is a clear downward movement (around 10%).


    A consolidation is when the market is going sideways (stuck in a trading range).


    Example: The Dow plunges from 15,300 to 13,800-14,000. I would call it a correction. However, if the Dow trades between 15,300 and 14,500-14,700 for a couple of weeks/months that would be a consolidation in my book.


    This is personal and therefore I align my strategies around that but it should not be considered as the official definition.


    1 Jun 2013, 09:40 PM Reply Like
  • And what's the other side of the mountain?


    Is correction in one day/one week or can it take longer?


    What's the downslide that's more than 10%. It's over time, keeps going down. After a bull, before the next bull, but much more than a 10% correction.
    1 Jun 2013, 09:43 PM Reply Like
  • Curls:


    No offense, but I still don't get it! lol :-)


    I might be tired that's all!


    The correction lenght is not important to me. What is important is to determine if the downward movement is a simple normal correction or the final nail in the bull's coffin. I believe that the bull is far from over. I see it as a great opportunity to buy and or add to great stocks. If you trade short term, that's different though.




    1 Jun 2013, 09:51 PM Reply Like
  • To try for an example -- On S&P chart in 2007


    In 2007 there's two peeks. In between is a correction?


    Then there's essentially a downturn until later 2008 when the big crash happens. So my question is, these crashes seems to always come within or after a sequence of downturn like from 2007 peek until later 2008. They don't seem to appear in the middle of a nice strong bull run?


    (In 2008 there was one more climb up in the middle of that downturn from the peek.)
    1 Jun 2013, 09:53 PM Reply Like
  • Curls:


    Yes it was a correction. But at that time, it was a double top signaling the start of the crash. Conditions were different (I think) at that time as the housing bubble was about to burst.


    I really do not see a bubble right now.


    Once the crash was done we had another big correction in 2010 and then another big one in 2011 and then two in 2012. We did not have any in 2013. it's about time! :-)


    A good and simple indicator to time the market for consolidation and possible crash is the 30-week moving average (wma). During corrections, you will see that the 30wma ignores the pullback and continues to trend higher. You clearly see the consolidation/crash coming as the 30wma flattens. It's not a perfect science, of course, but it helps.


    The nicest time to buy is when the market is going down. You buy a little here, then wait. If it goes down further, you buy a lilltle more and so on. Then you hold.


    The people that are trying to perfectly time the market rarely buy at the lowest point. The reason is simple, pessimism is at the extreme and everybody is scared.


    Makes sense?




    ps: As mentioned by Fear&Greedtrader, the market broke out of a 12 years trading range. We should have a nice ride.
    1 Jun 2013, 10:11 PM Reply Like
  • Thanks! So after the peak that whole long slide down that takes months & months is all part of the crash? I always used crash only for one-two-day big corrections over 15% (when the media says "the market crashed today.")


    Are shorter MA's more predictive than longer time ones? 30-week vs. 200 week?
    1 Jun 2013, 10:21 PM Reply Like
  • I missed this comment altogether when I was posting below. Oh well.


    This would all be much simpler if I could just point to the charts. But it's internetland.


    No biggie.
    1 Jun 2013, 10:25 PM Reply Like
  • curls


    Yes the crash of '87 when the Dow dropped about 20% in a day, the market was in a bull market from 1,000 to 14,000; I think there were other bad days corrections (I believe it was during the currency worldwide crisis and the Long Term hedge fund going bust) in the '90s but not similar to the 20%; as usual the Fed lowered rates
    1 Jun 2013, 10:30 PM Reply Like
  • Curls:


    Well, in my book a crash is a crash and you know it's a crash when you see it. One day like 1987 or a couple of weeks like 2000 or a couple of months like's a crash in my book. The media are...the media! :-)


    The 30day moving average will give you a clear signal. The Dow's 30day moving average is still in an uptrend but the Dow sits on it due to Friday's close. If we go further down and it flattens, that might be your signal. But again, the key here is your strategy. What do you want to achieve? What are your goals? What is your time frame? Personally, I am young and have a lot of time before retiring so I will not have the same strategy that other SA members that are already retired.


    Even with a crash, people will eat donuts, buy their medication and watch movies. Do we have undervalued corporations in these markets? Yes! Let's focus on undervalued corp and forget about the rest. :-) mid-long term, we rarely regret it.


    Forward S&P p/e ratio (2014) is at 13.


    Krustyman ;-)
    1 Jun 2013, 10:32 PM Reply Like
  • If you want reliable stats:



    1 Jun 2013, 10:50 PM Reply Like
  • @Rin - great! Thanks for the example! '87 is before my paying any attention to crashes :).


    "Well, in my book a crash is a crash and you know it's a crash when you see it. One day like 1987 or a couple of weeks like 2000 or a couple of months like's a crash in my book. The media are...the media! :-)"


    Oooooh. Now I get it.


    "But again, the key here is your strategy. "
    I came to the market to put my 50% cash (long story on why cash), only to see it was about to consolidate / correct.


    My eventual goal is to get a nice diverse ownership of index ETFs, with maybe a stock or two thrown in. Then to hold for 15+ years with only an occasional tweak. Right now, I don't see it as the time to buy in. So I'm waiting. When / if the market goes down, everything goes with it. So even if some things are good buys, it seems like it's best to wait at least till the bull looks like it's back.


    So meanwhile, I tried getting in for just a few hours to daytrade & picked up a few gains. That was fun. Long term, I don't want to be sitting at the computer though.


    Meanwhile, checking out your stocks like KKD, it's got me thinking learning more on stocks themselves, might be good for my longer term investing when I get in! ...& maybe even for also learning to spot some good shorter-term investments.


    I don't know that you wanted to know that much :).


    How did you get interested & learn?
    1 Jun 2013, 11:18 PM Reply Like
  • Author’s reply » @KRUSTY


    "Well, in my book a crash is a crash and you know it's a crash when you see it. One day like 1987 or a couple of weeks like 2000 or a couple of months like's a crash in my book. The media are...the media! :-)"


    I think that answered it. A correction/crash can be a one day, one week, one month, or a couple of months event. Now it is how severe it is % wise to me that defines if we had a correction or a crash,


    Hopefully FEAR and DOUG or someone else might add more light to this definition. But I do think it is important that someone defines it for us !!
    1 Jun 2013, 11:25 PM Reply Like
  • Curls:


    Why not build your own ETF with various stocks? :-) I always prefer to cut the middle man between me and my money as much as possible.


    How did I get interested and learn? It's a family ''virus'' :-)


    1 Jun 2013, 11:26 PM Reply Like
  • Author’s reply » RIN


    I *LIKED* your response.. hint hint..


    Do you *LIKE* my questions?
    1 Jun 2013, 11:32 PM Reply Like
  • What a nice virus to get!


    I have a long way of learning to go before I would build my own ETFs. Maybe I'll get there.... I'll be plugging away at it.
    1 Jun 2013, 11:35 PM Reply Like
  • IT,
    I've read thru the new comments from last night and Krusty has done a great job in explaining things..


    Your definition of a correction/crash is fine, especially the % of the move as a guideline. The "textbook " definition of a correction is 10% from the high, and a 20% move from the high would mean a move to bear territory. Always be wary of false signals on the way down as markets over shoot either way and keep in mind the effect that computers now play as the big boys will have their trading programs set to react to these levels..


    Two scenarios that are possible --
    We have gone up about 25% from the Nov' 12 lows, not unreasonable to give half of that back -12%.


    We trade like 1995 and all corrections are contained to less than 5%.


    If I knew for sure I would own my own island -- LOL


    This is all stuff that we should watch but draw no conclusions just yet ,its way too early ..


    I can reinforce Krusty's thoughts by stating that all should take note that movements / trends may take a considerable amount of time to play out..


    And As Krusty stated so well ,a lot depends on your particular situation in life and your views on the market. I can add its important to be flexible and most of all comfortable with your decisions.


    To put my views in perspective, I am in for the long term, not a day trader, at times I may initiate a position to catch a trend over a shorter period (3-6 months) BUT when I do that it is in a stock that I would not mind holding for the longer term if I decide to.. I can post some examples if someone needs more clarity in my strategy, I don't want to get off track on the generalities that were spoken so far.


    With that backdrop . I am currently in an observation mode to see where this recent selling takes us. I always believe the market will present opportunities, so for me its time to be patient , wait for my price and see what the market is telling us. In short do nothing and be ready to change strategy if necessary.


    As stated above its way too early (unless you are daytrading or short term oriented) to form a conclusion..
    It wil be interesting ...
    2 Jun 2013, 09:42 AM Reply Like
  • Krusty,


    I really like that approach ....If one is so inclined you can build a nice "basket " of stocks.
    2 Jun 2013, 09:46 AM Reply Like
  • Author’s reply » @KRUSTY or anyone


    A crash? 20% ?? Over any time period ?
    2 Jun 2013, 11:33 AM Reply Like
  • Fear&Greed:


    You are absolutely right. We trade like 1995. Furthermore, the S&P ratio was at approximately 15 at that time and the forward p/e sits at 13 for now. This tells me that any correction should be well contained, but as you say sometimes the market over shoot either way.


    Cheers! :-)


    2 Jun 2013, 12:28 PM Reply Like
  • IT:


    With a forward p/e of 13 for the S&P (for 2014) I would be extremely surprised to see a 20% drop within the next year or two.


    We are far from bubble territory IMHO.


    2 Jun 2013, 12:31 PM Reply Like
  • IT:


    First, and very significantly, look at Friday's indices. Equities mostly had a flattish day until 2PM, then accelerated losses into the close. As has long been the case, volumes were modest, but also accelerated into the close. However, the significant and notable event was the behavior of gold. Gold was crushed, right out of the chute at the open, then continued to sag all day and also accelerated its losses into the close, closing at the low for the day., off significantly more than equities.


    Now, why is the significant?


    It's significant because for many months previously, gold and the equity markets have moved inversely to each other, with gold sagging as markets improved and skyrocketing upward on days of distress. Now, we see radically different behavior.


    As an aside, I always found it ironic that gold was moving inversely to the markets because, theoretically, gold is supposed to be a commodity and supposedly an inflation hedge. Therefore, it made little sense to me that it would decline, as the market reflected better economic prospects (which really might create inflationary pressures), but would rise on days, like Friday, when market went off a cliff (market and economic decline is deflationary, so why should gold rise?)


    The answer is that, apparently, gold adherents saw QE as inflationary, so by circuitous logic, weak, not strong, economy/markets became the threat because more QE would be added, theoretically causing inflation. The problem is that QE has been spilling into excess reserves, not expanding the money supply, so the inflationary effects have been muted.


    So, now, gold and the equity indices have moved together. Apparently, using similar logic, now, the threat of QE's removal is deflationary, so gold is a no-no. I guess gold adherents believe that the Fed really will taper off QE and that the effect on the economy will be deleterious.


    But, in fact, QE's continuance or gradual stoppage is going to have little impact because once the Fed has restored the liquidity pool to capacity, QE has simply added to reserves, having no economic impact. Therefore, eliminating useless additions to reserves will, similarly, have no economic impact, either. We'd only notice genuine impact is the money supplies were somehow impeding credit formation, which they are not. Credit formation is being limited by demand limitations and credit qualifications, not by money-supply issues.


    So, what does all this have to do with the indices, corrections, etc?


    It serves to point out that the market, far and wide, even including gold adherents, believes the absence of QE will be very deflationary, damaging the real economy and justifying lower valuations. It is my belief that this conclusion and current emotional trading will prove to be in error. QE and slight alterations in rates will be a non-event, economically.


    So, I'd look for some overdone emotional downside trading, falling, possibly steeply, for some period, then a snap back. As usual, those that throw in the towel late in this episode will be damaged. Those that remain will fare better, and those that exit or have exited early and have prescience to re-buy at the trough will fare best. The market is only off 3.3%, so far, and I expect this episode will likely be contained within 10%, if that.


    However, another wild card looms. In a month, it will be again time for quarterly data. SPX earnings have fallen for three consecutive quarters. In the present environment the market may be less forgiving of any disappointments in the upcoming quarter, so any bounce that may emanate in the ensuing 4-5 weeks from recovery from the current QE-removal phobia will be in jeopardy, if the 2013Q2 and/or outlooks are less than satisfactory. None of these results will be occasioned by the current QE debate, but these results will have major impact on the markets.


    Ironically, if equity markets exhibit further weakness after Q2 reports, bond markets will firm up quickly, and the QE-removal effect on rates will quickly be forgotten. If, however, corporate results are bullish, I'd look for rising equity markets in tandem with rising interest rates and declining bond values.


    2 Jun 2013, 12:43 PM Reply Like
  • Those are interesting quotes. Not only did Schiff not have a clue... but he covered his backside with every "it's going up & down" prediction.
    2 Jun 2013, 12:51 PM Reply Like
  • Without any indications otherwise this may be a delayed "sell in May go away" profit taking using concern over rates as the excuse. Markets have hit new highs in spite of earnings that have be in decline for 3 quarters. So its not unreasonable to think of wanting to lock in some gains now because if 2013Q2 earning look fine the markets resume their rise, if earnings do not then the markets rise because it has already discounted the poor earnings. In either case any rise will begin lower then where we are right now.
    2 Jun 2013, 01:32 PM Reply Like
  • Author’s reply » @TACK


    Thanks for the concise overview of the markets. It certainly has me rethinking my positions..
    2 Jun 2013, 01:34 PM Reply Like
  • Tack:


    "QE and slight alterations in rates will be a non-event, economically".




    Let's keep our eyes on 2013 Q2.


    2 Jun 2013, 01:55 PM Reply Like
  • Author’s reply » @ENIG


    Welcome , appreciate your opinions..


    2 Jun 2013, 03:03 PM Reply Like
  • @ Krusty


    Those are interesting quotes. Not only did Schiff not have a clue... but he covered his backside with every "it's going up & down" prediction.
    2 Jun 2013, 03:58 PM Reply Like
  • Curls:




    2 Jun 2013, 06:57 PM Reply Like
  • Tack:


    Very nicely laid out. Clear & easy to follow logic. It makes very solid sense. IMHO. Thanks for taking time to post it.
    3 Jun 2013, 01:42 AM Reply Like
  • @Tack Gold moved against the equity markets on Friday because everything is closed once London closes and China is closed until Wednesday. So, normal market behaviour is not in the offing. Crush gold with the NFP report is ho-hum news, timed with a 3 day holiday in China while the Yen appreciates? Hrm. I smell a rotten fish.


    These are not normal days and hence perfect opportunities for people to feed their agendas. I'm frankly surprised they didn't try to take gold down to $1300 on Sunday night knowing that Shanghai was closed and there would be mild margin selling on the Sydney open due to Friday's sell-off.
    11 Jun 2013, 11:52 AM Reply Like
  • Well, a little SA technical discovering. I wanted to post after Krusty. However hitting reply to IT's comment, put mine before Krusty's even though by timeline mine was after his.


    So I deleted that comment so I could switch to clicking reply on Krusty's comment & re-post mine after his.


    So that worked.


    However, after deleting my original comment, it wouldn't let me repost my comment to either reply button. But when I added a few new words at the top, SA no longer recognized it as the same comment... and posted it.


    Then I tried editing to remove the new words... but it won't let me, saying editing has timed out for this comment.


    So obviously a few small glitches in the SA commenting software that rarely effect anything. I'm passing on my experience... just in case it's useful someday.
    1 Jun 2013, 04:57 PM Reply Like
  • Author’s reply » @CURLS


    You pulling an Abbot and Costello routine on me here? Whose on first?



    I just had to do it !!
    1 Jun 2013, 05:08 PM Reply Like
  • @IT & Curls,


    You guys are making me laugh !!!


    I don't know is on third !!
    1 Jun 2013, 06:19 PM Reply Like
  • Ha, ha!! I didn't realize earlier you were referring to the ORIGINAL Abbot & Costello routine. I thought it was an A&O about stocks!


    What can I say... I am truly a computer geek at heart.


    ...I'll definitely be buying back into my IBM stock. (I sold the other day.)
    1 Jun 2013, 08:18 PM Reply Like
  • Author’s reply » "...I'll definitely be buying back into my IBM stock. (I sold the other day.) "


    What is changing your mind so quickly ?
    1 Jun 2013, 09:05 PM Reply Like
  • It was a (supposed to be humorous) comment on my owning my connection to being a computer geek.


    At some point when I'm building my portfolio back, one of the adds will be IBM. Right now I've left the market.
    1 Jun 2013, 10:28 PM Reply Like
  • IT; Love your articles and especially your readers comments. Anyway, am getting crushed here with my silver stocks [EXK], {GPL}, and {AUY}. Lets forget about my JAG & GBG for now. These are in my retirement account, but I am retired, so the plan is not working. It will, but can I live long enough to see the rise? Had been buying physical Ag over the past 6 months, getting spanked there too. Sometimes we need to remember why we bought a particular stock or commodity, would be a great idea to write this in a journal of sorts as we go along. Why did I buy silver? Count the ways.
    1. Had never, ever had any.
    2. The coins and small bars are pretty. The big one made a dandy doorstop.
    3. Brain training, trying to remember where each purchase is hidden.
    4. Had used money that otherwise would have gone to local casino.
    5. Am waiting for the next festering body sore, to test the antibacterial qualities.
    6. Nobody that I know [close by] has any either.
    So, I am happy with my physical Ag, but not happy at all with my miners at present time. Patience? Reminds me of my all time favorite poster of the 2 vultures sitting on a dead tree branch looking out over the desert, you know the one. "Patience my foot, I am going to kill something".
    2 Jun 2013, 02:36 AM Reply Like
  • Author’s reply » NOC,


    Great points and as you know I really don't like the miners when I feel owning the real thing is better in the long term. Like your list though. However I have see where the miners have been beat up so IF the physical metals do increase in value ( I am in that camp ) then some miners would do as well.


    Soros and Paulson, 2 heavy hitters, opened a position in (GDXJ) AND ALSO GOLD OUT OF (GDL). But the million dollar question is did they buy physical as well with the proceeds? Me thinks they did !


    Oh, and you can use the word ASS here in your jokes. My wife calls me that frequently and swears to me she never curses. So I guess for the Italians were ok with it. Now as far as coaches go I have heard it all over 25 years. Words and phrases that would make you laugh. My comment back has always been "I MIGHT BE BLIND BUT I AM NOT DEAF, YOU'R DONE FOR THE DAY ( EJECTED )"


    Glad you posted your thoughts though. Does anyone disagree with my premise that if physical gold and silver increase then the miners should do well too? Plus can a miner do well yet physical DROP in price? Curious ...
    2 Jun 2013, 11:15 AM Reply Like
  • Author’s reply » For symbol clarification..(EXP) (GPL) (AUY)
    2 Jun 2013, 05:15 PM Reply Like
  • @Nocnurzfred


    Your list is hilarious.


    I can relate to a few.


    1. I seriously thought since I pulled 100% out to cash, maybe I'd collect some bills & roll around in them. But they're dirty so I'll skip that & get ice cream instead.


    3. My family member plays this game with me all the time. They're leaving on a trip so she tells me where her cash is stashed. She has no idea where her trail of bills are in her house...


    5. I've been hard sold to, on silver's antibacterial qualities. But those green food containers with it imbedded were a GREAT price at Boscov's. Apparently, a lawsuit or something... good buy, but shorting whomever, would have been even better! Shucks, missed that one.


    Thanks for the laughs!
    2 Jun 2013, 08:24 PM Reply Like
  • The key right now with miners is to examine their liquidity - you dont want to buy the miners that will have a cash crunch. That's why I emphasize understanding the all-in costs because that will give you an idea of how long they can survive. Of course, gold and silver is much safer and you have less worries if you can be patient and hold throughout...
    2 Jun 2013, 10:05 PM Reply Like
  • Hebba-


    I believe you posted a list of low cost miners on another article not all that long ago.
    Since I can't find it could you post it once again here? Or even better an update.




    Windwood Trader
    3 Jun 2013, 06:36 PM Reply Like
  • Yes WT - I posted an article detailing the true all-in costs of gold miners for 2012 ( Unfortunately it did not include the pre-revenue costs of some of the miners, but I will be posting a similar first quarter listing of the miners as soon as costs have been compiled which will also include pre-revenue smelting costs
    3 Jun 2013, 08:38 PM Reply Like
  • IT:


    As previously discussed, we had a complete wash out in the juniors. So solely based on sentiment, they should bounce. Look at MUX. It is the best candidate IMHO. Especially for traders as the volumes are usually very high.


    Gold can go down and the miners go up if their costs drops significantly.


    Very nice for trading but too complicated and speculative as an investment.


    For the record, I have been in the physical silver market from February 2002 to September 2011 all the way up. And I would have made more money with great stocks instead of silver, so yes fo trading but never again as an investment.




    Ps: and selling a stash of silver bars is a nightmare. Really, really cumbersome to say the least.
    2 Jun 2013, 12:46 PM Reply Like
  • I keep my silver in jewelry. No need to sell, & I get to polish it instead.
    2 Jun 2013, 08:25 PM Reply Like
  • Author’s reply » MOVING ON TO CHAPTER 4 !!!

    2 Jun 2013, 04:43 PM Reply Like
  • Author’s reply » I might add please remember to bracket symbols !! I think I might have missed a few !!
    2 Jun 2013, 05:16 PM Reply Like
  • IT:


    Regarding curls' question.


    The price of your bond will move inversely to interest rates. When interest rates go up, your bond will go down and when interest rates go down, your bond will go up. these are previously issued bonds trading on the open market.
    But why?
    Let' say your bond is issued for $1,000 for 10 years with a 3% coupon or interest rate, paid every six months. Then interest rates rise to 4%.
    If you want to sell this bond, nobody will buy it when it is paying 1% below market rates (3% vs. 4%). You can’t change the interest rate on the bond. That’s fixed at 3%. But you can change the price you will take for the bond.
    The annual payment of $30 ($1,000 x 3%) must equal a 4% payment. Therefore, your bond must be discounted to $750 so the $30 fixed payment equals a 4% yield on the buyer’s investment ($750 x 4% = $30).
    If interest rates are going down you will be able to sell your bond at a premium over face value because the fixed interest rate would be higher than the market rate.


    2 Jun 2013, 07:36 PM Reply Like
  • Author’s reply » @KRUSTY


    I believe her question is WHY do interest rates move up or down? Can you answer that in part 4??
    2 Jun 2013, 08:07 PM Reply Like
  • @Krusty -- I'll post this on the new page too. I know about interest rates vs. bond value & premiums & discounts (I owned a muni & cef once upon a time). I didn't ask my question well at all. I'm wondering who's setting the treasury prices? How are the rates themselves determined to go up or down? Corporates & junk are based off the other going rates. But when rates themselves went up last week.... who's rates went up & who decided to push them? I'm quite sure the answer will make me feel like a kindergartener... but I've gotta ask.


    What is very helpful in your answer here, is that I've never had a clear sense of how to calculate the discount or premium equivalence, so I'm saving those notes away!
    2 Jun 2013, 08:30 PM Reply Like
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