In light of the recent ( and suggested ) pullback in Gold and Silver Mining Stocks…
I had to pull out an “oldy but a goodie”. Makes me laugh looking back….
Looking ahead……..this pullback and continued build of small gold and silver miners should prove to be very, very profitable.
I’d been sitting on the sidelines for quite some time ( as markets continued to astound ) until just recently taking aim at a couple nice set ups. Here’s a look back a couple of weeks. Let’s see how ‘l Kong made out.
Short USD: August 1st – CHECK
Crude Oil Bottom: August 3rd Post – CHECK
USD/JPY To Parity – Nasdaq Double Top – CHECK
Patience always the key when trading. You really need to plan your attack and not get caught chasing markets. In any case…pleased to be back in action. Looking forward to my next adventure. Stay tuned folks, and if there is anyone here from Chile ( Yes the country of Chile…in South America yes ) please drop me a line.
The chart says it all, as many a reader still has this illusion that “stock market highs = economic prosperity”.
Count your blessings if you’ve made out well….watch for post election mayhem.
The current “gong show” playing out in U.S politics simply cannot be ignored ( as much as I’d love to just see this go away) as the economic “shit storm” brewing underneath continues to gather steam. I implore you..can any of you find a single “legit argument” that the price of U.S Equities will continue to climb past November?
As suggested in the previous post. It’s time to start making a plan. It’s time to batten down the hatches and consider “what the hell you are going to do with your current portfolio” as “E Day” ( election day ) draws near.
Any solid arguments that Clinton can improve/save it? How bout Trump?
From the jungle side looking in……I can’t see any good coming from either but….so we shall see.
Opinions and views more than welcome.
Not to say there isn’t considerable medium / long-term opportunity in the miners ( cuz there is ! ) – you may have missed the boat.
This chart will make your head spin as……the gains have been nuts. Even Gary Savage ( apparently ) got this one right.
Short term – I would encourage you to just stay put, but as I’ve always said – Get this stuff on your radar! You need to identify levels, plot support and resistance on your charts, keep a pad of paper by the computer for f@*k sake!
Consider “post election” as a fantastic time to enter, as we are obviously over extended here. But get a list together! Make a plan! It won’t matter if the people of the Unite States vote for – the puppet or the clown.
Gold/Silver will both head for the moon as the entire planet completely freaks out.
I’ve done my best to explain this on several occasions…”oh how I’ve tried to explain this!”
But you humans….crazy humans – so anxious to “hit those buttons” so “spurred by emotion” compelled to “buy buy buy” or “sell sell sell” on a moments notice. If only for a minute you could learn to slow things down, you’d quickly realize – you’ve missed nothing, there is no rush, the markets move far slower than you think. Everything will be O.K, and “even better” – if you could just manage to control your emotions.
If you are considering placing an order on a particular asset “short” (with hopes that it will fall in value) there are most certainly ways to go about this without “losing the farm”.
You need to understand how/why to place “limit orders”.
Limit Orders – How To Use Limit Orders
A limit order is an order to buy or sell a set number of shares at a specified price or better. A limit order guarantees price, but not an execution.
So for example…..If I see a particular stock priced at $108 per share, and I have some idea that said stock is likely to fall in value. I don’t just “sell short”! I look to place a “limit order” to sell at a set price LOWER than the current value of $108!
If in fact the stock price falls ( lets say my order was to “limit sell” at 107.50 ) then great! I get my order picked at 107.50 and am well on my way! If the stock shoots for the moon and I was totally wrong in looking to go short…..my “limit order” does not get picked up….I am not in the trade….the stock rockets to $120.00 and I am left with no trade…..but a perfect example of “no trade….being a great trade”.
Limit orders allow you to “take your shot” – but only on momentum moving your way. If price doesn’t move in your direction – you don’t get picked up!
Use ’em – I know I do.
Several of’em currently lying in wait.
These days it makes little sense contemplating every single “little move” in any number of currencies, as forex markets are more or less flat / stagnant. Sure the Brexit did it’s thing and the pound (GBP) got hammered, and sure the Japanese Yen (JPY ) has been on a tear since big banks and large-scale traders have clearly been ditching their Carry Trades – in preparation for a larger scale fall in risk assets ( likely to follow post U.S Election ).
So what’s a trader to do?
Many have been suggesting that the long-term “double top” in Tech stocks / Nasdaq could very well be what markets are shooting for, prior to pulling back….and it looks like we are just about there.
What might throw a number of you for a loop, will be to keep a close eye on USD as U.S Equities pullback.
Traditional thinking would have the U.S Dollar rise ( as U.S Equities are sold and “cash is then raised” ) but we’re not much for traditional thinking ’round these parts. Nothing has changed with respect to the longer term idea that USD is set for a much larger fall.
I would take a very serious look at “any currency” Vs JPY on the smallest indication that “risk aversion” rears its ugly head as…..money is gonna pour back into the primary funding currency of this charade ( that being Japanese Yen ).
I’m sure by now you are all well aware – I can’t stand the mainstream media.
I cringe every time I see some “breaking news story” ( particularly in the U.S ) hinting of rate hikes, when in reality…..this is complete and total bullshit.
Let’s do a test.
Ask yourself if this mornings headlines such as “Fed rate hike odds jump on positive July employment report” didn’t bend your ear. Sounds pretty certain. Sounds like the odds of a rate hike are right around the corner.
You didn’t read the rest of the story. As you live in a world so full of information….your habits have changed, your DNA on the move. You don’t “read” anymore. You scan. Exposed to more information per day than people 20 years ago had available “per decade” – you have no real idea what to believe, as there is so much bullshit out there….so much crap…you’ve morphed into a “scanner” and not a reader. Soon to be a tiny body with an oversized head, sitting in a chair of virtual reality – sipping some algae/protein/zanex based concoction – sold to you by Dupont.
U.S Rate Hike – Total Bullshit
The probability for a rate hike in September jumped to 18%, from the 12% registered prior to the data, according to CME Group’s FedWatch tool.
You getting this? a jump in probability from 12% to 18%…….and markets go wild. Kinda like a jump from “zeeeeeeero” to never….but the spin doctors got’choo.
Do yourself a favor……….stop watching cable. You are not yourself.
Note the bold text in this post.
Looks like I “got’choo” too. Rate hike impossible. Not gonna happen. Actually……an 82% change it’s not gonna happen.
Oooops……isn’t that what you read?
For those of you that looooooove technical patterns and set ups – crude oil is starting to look good.
If we’ve established that The U.S Dollar is set for a solid turn lower ( which we have! ) then it only makes sense that commodities “priced in USD” should be shaping up to make the inverse move higher.
Crude Oil Set To Move Higher
Considering this incredibly long period of consolidation / distribution in most asset classes, it looks like we are finally going to see a number of “standard correlations” come back into effect.
A large move lower in USD being the key factor, as these assets priced in U.S Dollars begin to move higher.
I’m simply ignoring “any and all” other news with respect to inventory / consumer demand etc as oil will take a sizable jump on further USD weakness.
I laugh out loud this morning….as Im sure you´ve seen my last two posts – encouraging you to get short USD.
Talk about timed to perfection. USD is getting hammered on ¨no real news¨ and look at that…..U.S Equities falling pretty hard too. Again I wonder about all those blow hard ¨dollar longs¨struggling to understand how I keep making this look easy.
The trade is ¨short USD¨…….the reasons are many.
Timing has been key here these past months as you´ve recently seen me come out of hiding to bang down the first trade in weeks – if not months.
Boom……. thar she be.
As I am always a touch early……..short USD trades are looking very good here.
One can see that The Buck has had it´s day, and has now been soundly rejected at the 200 SMA.
You guys can look back and recall short trades in Apple – with the exact same set up. Very straight forward…when an asset hits the 200SMA from below, then gets smoked. A very large level of resistance, and generally a pretty clear indication that things will be headed lower.
USD Rejected at the 200 Simple Moving Average
You can look for a million different reasons, but fact remains that a rise in interest rates will blow this market up, and that if anything….further easing will likely make more sense, and that´s bad for USD.
You have to keep in mind that the big boys are ¨spinning the story¨ not sheepishly following along! Long positions by the big boys have already been sold to you, as the common man ¨reactes¨ to the trickle of silly news stories aimed at keeping you on the wrong side of the trade.
You falling for this shit? Grab a backbone. Get informed. Remember the days when The U.S Federal Reserve was printing like mad, and crushing the currency with hopes to boost exports and the economy?
How did that go?