CTMike

Friday Outlook: Commodities, Global Markets

David,
This is the first time in my memory I didn't see a GLD chart. Conspiracy theorists will claim you have moved over to the dark side. My "guess" is that you feel it is irrelevant or golds moves are so unexplainable its not even worth trying? Please explain so I don't have to "guess".

My take on the market for what it's worth is that the administration is gambling that they can "talk" the markets/banking system back to health and they very well know they are stretching the truth and downright lying at times. They have put all their cards on the table for this final bluff. If it works they will be hero's. If it fails, some of the doomsday scenarios become a possibility and the general public will turn on them faster than the speed of light and possibly not return until a new administration takes over.

Have a great weekend and thanks for all your insight/analysis.

Wednesday Outlook: Commodities, Global Markets

It's beginning to seem like the half life of major events such as the Fed buying treasuries is not much more than a day; after 1 day the impact is 50% diminished, 2 days 75% diminished, 3 days 87.5% etc. This clearly says the market is without direction and the next piece of news will whip it in another direction. Also, makes the market incredibly susceptible to short term manipulation. Unless you have the inside track on the next piece of news, you have a 50% chance of winning/loosing in the short term. I'm with David, might as well go to Las Vegas than invest in this market.

The next collectors book will be "The Great Financial Crises of 2008-2010; How the Public Was Fleeced in the Greatest Con Game In Human History". Do you really think the world would come to an end if some of the super banks disappear. I've never seen a vacuum last more than a few nano seconds. The vultures and local banks would immediately step in and pick the carcases of anything of value and let the toxic assets rot as they should. My local small town bank does a great job at supporting the community the old fashioned way - nobody on the payroll makes 7 digits and they don't even know what a financial engineer is. (AND, when GE money market recently put a 21 day hold on a credit union check even though it cleared after just 3 business days, my local bank worked with me to avoid problems.)

Waiting patiently for reality to come back.

Wednesday Outlook: Commodities, Global Markets

I see what you are talking about. Looks a little sloppy to me. My experience with H&S's is thay are not strong indicators and sloppiness just makes them weaker.

Look at March 08 to mid Feb 09 plus mid Feb 09 to today. That's a text book cup and handle with a perfect handle. One can argue that the cup is sloppy so breakout will be prone to failure. But my expereince is that a good handle and a solid breakout are more important.

Of all the charting/analysis/etc. I've done over the years, I've had more success with the cup and handle formation than anything else. Keep in mind that we will need a strong breakout above 100ish (quickly and with extremely high volume) to be valid. From there it could go to 130ish if you believe in chart gods. More often than not, breakouts are followed by a pull back to the top of the cup but then its off to the races if it holds.


On Mar 18 02:33 PM paultaut wrote:

> Ok, I see where you're coming from.
>
> a Pattern within my pattern.
>
> I start with the first breach of $100 last year, with the left shoulder
> being the low around 84 in early april.
>
> If GLD can manage to hold the same $84 area on this move to the Downside,
> I will have my right shoulder.
>
> It used to be so much easier.

Wednesday Outlook: Commodities, Global Markets

H&S Top - left shoulder late Jan/early Feb, Top Feb 20, right shoulder now. Neckline to top was 87 to 97 so a chartist would predict we could be going to 77. Just not sure how many traders are watching GLD this way and therefore help the "prediction" come true?? This is pretty short time frame but meets the minimum of 6 weeks. Won't show up unless you use a daily chart.

I am now using 6 month and 1 year charts. Maybe if there is a legitimate rally, I will use longer term charts but for now I think its mixing apples and oranges (maybe punch bowls and ter*s).
I gave up on Bolingers a while back because I felt like many of these algorithms, you can find many examples where they are helpful (the ones in the books) but just as many or even more that are useless/wrong. When I looked at GLD after your note I used 20 day moving average and 2 deviations on a 6 month chart..
I'll go way back the the $700 days to see if I can see your H&S. I sort of feel like gold has many of the factors that make charts usefully for typical stocks but has the added complexity of just being "gold".
Finally I really don't like the feel of coin shortages. My experience is telling me that this is all hype to suck out as much money as possible from the average guy (Chuckie?) and then pull the plug. This is classic marketing - create a demand and then a perceived shortage to drive up the price. Works until you reach buyer exhaustion. With all the financial chaos and trillions of new dollars rushing into the system and the market looking 6 months to a year out, why hasn't gold exploded?
I have GLD, SLV, bullion in both gold and silver, and several gold equities. I'm starting to feel sick.


On Mar 18 10:31 AM paultaut wrote:

> Where is the Head? of the H&S top.
>
> I have a perceived neckline, an inverted pyramid with the nadir about
> $700, which I use as the Head for the Bottom, left shoulder formed,
> right shoulder forming.
>
> Are you looking at something smaller than a 1 year chart? If so,
> please point to the time frame.

Wednesday Outlook: Commodities, Global Markets

paultaut - how did you set up your Bolinger? The services I use all ask for conditions.. Plus, I think the head and shoulders top formation on the daily GLD chart looks a lot stronger than the bottom you mentioned.

David Fry - I worked in the Washington environment for many years and what you see is only the tip of the iceberg. There are a few congressmen that are trying to do the right thing but they get ostracized by the herd. Don't ever believe a single word that comes out of their mouths. You need to set in on just a few backroom conversations and you will quickly learn they are a bunch of phony scoundrels that have a sliver tongue. They will say whatever necessary to 1) discredit the other party, 2) assure reelection 3) enrich themselves, 4) get more power, 5) make themselves "look" like true patriots. What drives their decisions has nothing to do with what the public wants or what is in the best interest of the country - never even considered other than making public statements to make it look like that is what they are doing.
Enough of that. I'm beginning to see the press commentaries fall in line with the administration. It's like they have been told they will be arrested as terrorists is they print anything negative. All of a sudden the light at the end of the tunnel isn't a train (and they are ignoring the whistle) but sunny recovery just like BB is saying. Even world events are falling into line. What happened to N Korea? Has Iran's nuclear program disappeared. Are India and Pakistan best friends. What about all the revenge killings that the Taliban continue to carry out? OH, sorry just like Ben fixing the economy, Hillary has made all world problems better no too. My point is that you are one of the few that hasn't sold your sole. BUT, and this is a huge BUT, we all know perception is reality and if everybody begins to believe things are turning around, is it possible the "real" momentum could begin to turn too? If so, at what point will "you" say ignore the facts and jump on the train? Or will your position continue to be don't jump on the train even though its leaving the station because right around the corner is a cliff and no bridge?

Thursday Outlook: Commodities, Emerging Markets

David hit my hot button commenting about broken politics,
David, you are right regarding the suggestion that Washington needs to be fixed. Having worked there for a long time, I was was an eye witness to the debauchery of our political system. They spend trillions of dollars and accomplish very little (lots of self interest accomplishments but very little will keep this country great). I can't think of a single thing of significance that is working well: social security, Medicare, immigration, infrastructure, education, health care, energy independence, financial oversight, manufacturing, etc. are all floundering. The system is so focused on hidden agendas and "politics" that it is doubtful that any of these issues will ever be fixed.
David's suggestion of term limits is a good thought but remember, these folks are not stupid and they will quickly adjust and keep the status quo. Two more effective actions are 1) pass a constitutional amendment that the budget must be balanced every year and all debt has to be retired within X years with the sole exception of time of a declared war. 2) Reduce the federal budget X% every year and return power back to the states and local governments and stop becoming a socialist country.
David is right in that term limits or any other attempt to control power won't happen anytime soon. Folks are simply too distracted. It's like the frog in a pot of water that is heating up. The frog could easily jump out but that warm water feels oh so good and at some point its too late. Unfortunately, it will take a cataclysmic event such as another great depression or another terrorist attack that makes 9/11 look like a non-event before attitudes begin to change.
If we can get power back into the hands of folks (local representatives) that we know and trust, then we have a chance of turning this turned around. If we continue the status quo, we deserve what we get.