However we are entering the timing band for one of those daily cycle corrections. It's not unusual to see this begin as a profit-taking event on the employment report, as we enter earnings season.
As long as earnings season meets expectations then that is all this should be, just a profit-taking event. However, if earnings season disappoints then this could intensify significantly. If in addition we start to see stress in the European debt market escalate it would magnify the rally in the dollar increasing the downward pressure as stocks begin the move down into that cycle low. Let's face it the problems in Europe aren't going away. The cancer in the debt markets is going to continue to chew its way up the sovereign food chain until it finally reaches the US bond market.
The fact that the dollar has consolidated for several weeks above the double top breakout is a strong sign that another powerful leg up is beginning.
Gold may or may not have put in a final D-Wave bottom last week. But there is a good chance that bottom is going to get tested in the next couple of weeks. And then of course we will have to contend with the selling pressure as stocks move down into their intermediate degree decline in February and March. That could conceivably drive gold back down below $1523, although I think any dip below that level will only be marginal and quickly recovered.
Right now patience is the name of the game until the stock market has formed a daily cycle low which is due sometime in the middle of January. Cash or a modest position in the dollar index is safest bet for the next couple of weeks.
Commercial traders’ net position in euro futures have exceeded last week’s ALL TIME record net long position this week with an even bigger one http://goo.gl/n2o4c
ReplyDeleteBack to my original intent.....
ReplyDeletehttp://www.energyindepth.org/shale-continues-to-drive-u-s-manufacturing-renaissance/
The foundation for the next boom is here folks.
Tim
ReplyDeleteHow to do ever find the time to run your fund and do research on companies ?
You seem to be on this blog 24/7 .
seems to me you would be better served to spend more time on the fund you run than posting every 2 minutes or so .
i enjoy your posts but it seems every other post is coming from you..give it a rest for awhile please
T+J I do agree with possible energy boom due to shale, but as long as Obama in office will fight this source of energy. Mainly enforcing epa. Hopefully he will aquiesce, or more favorable political party in office.
ReplyDeleteStill disagree with idea of fed expanding money supply, however it is lended into the system. I think congress should vote on increasing supply. Don't like so few at the fed making such decisions without true oversight.
As population grows money supply has to be expanded, but under a consensus that can be moderated or controlled by voting public. My 2 cents.
WW you still short? I got out with $14 move, as usual only short with one contract. Waiting for cycle to go larger.
ReplyDeleteYou sound like Beanie and his solar obsession.
ReplyDeleteWe aren't going to produce millions and millions of jobs world wide because of shale. Plus shale is geologically specific. It's only going to produce jobs in the area where it's located.
We need a completely new industry to do that. Eventually it will come but it is going to take time. We also have to cleanse 40 years of built up debt and cure our energy problems before it can happen.
Robert -
ReplyDeleteUse a little logic here. You write as if I am just writing posts blindly, when in fact - the truth is that I am in multiple dialogues with multiple people. Notice how you addressing me is now causing another post. Had you not offered up advice directly to me, it would have saved a post. If I have 6 people all presenting questions and making statements for me to answer, and each writes 3... then as part of the dialogue, it is polite to engage them. Unless of course they are personal attacks. That means I can easily write 18 posts, which is 9% of the page, making it seem like I am just posting and posting.
If you didn't want another post from me, you shouldn't have engaged me in dialogue. Of course, you had to take a little dig though. How about refuting the ideas rather than attacking the person? It is those kinds of posts that truly take up space and detract from the conversation.
riley -
ReplyDeleteI pretty much agree with everything you present. The boom will be much more likely under a different regime, but the good news is, the White House is actually not as opposed to all of this as the loony liberal environmentalists would have you believe:
http://blog.newsok.com/politics/2012/01/11/white-house-says-natural-gas-boom-could-mean-substantial-economic-benefits/
http://energytomorrow.org/blog/the-white-houses-natural-gas-manufacturing-connection/#/type/all
Fracking stocks have been crushed recently due to worry over the EPA bringing a moratorium. This most likely won't happen, but it is usually scary news that causes opportunity.
Check out CJES from a valuation standpoint. They growing at 140% a year, and trading around 8 P/E. Next year they are estimated to earn $4.28 a share. Slap a 8 P/E on that, and there is room to rocket. Careful with frack stocks in the short term though. Regardless, they are ready to explode.
making nice progress on the database of my my new CycleSnifR (tm) software. version 0.1 winging its way soon
ReplyDelete"You sound like Beanie and his solar obsession."
ReplyDeleteThat is a bit lazy in your analysis, but it is late Friday night, so I will cut you some slack. Shale liquids are profitable and do not need government subsidies. Solar, well that's another case. The two are apples and oranges. A government subsidized energy source is not the answer. A private sector revolution that is creating massive wealth, is a different animal. Hopefully you can see that.
"We aren't going to produce millions and millions of jobs world wide because of shale."
That is purely your opinion. You would benefit yourself to read industry reports and peer reviewed studies of people who know how much oil is in those plays, rather than just wing it with an opinion.
http://fuelfix.com/blog/2011/12/06/natural-gas-boom-projected-to-fuel-job-growth/?utm_source=twitterfeed&utm_medium=twitter
And they are just scratching the surface on the size of these plays. Millions of jobs from this revolution, plus many more from velocity of paychecks from these jobs moving through the rest of the economy.
"Plus shale is geologically specific. It's only going to produce jobs in the area where it's located."
The size of all the shale that has been discovered is about the size of France. That is not just a few towns geologically. It will effect places across multiple states.
Next, those people in the Bakken in North Dakota for example. They have jobs, and make money. With it, they buy cars, and jewelry, and clothes, and bikes, etc.
Are all of those goods made in the Bakken, therefore leaving only the Bakken region to benefit?
Of course not.
Dang Gary, obsession, really, I'm under no illusions of our debt problems. I've been between 50-60% gold stocks since 2002. I couldn't believe we didn't have major cleansing post tech bubble. I was new to markets and money flow. The fed changed my view on things quickly. I know the money problem has only been shifted to governmental books.
ReplyDeleteBut saying a boom in shale energy relates me to solar rejuvination. Count me out. I think we are on a one way street to depression-ville. But I also think there will be a boom in shale recovery in relative terms to actual recovery amounts, and companys related.
I guess my best comparison would be apple with I-phone, which I consider a boom to cellular, but never ever think a resolution to our debt crisis. Lump me on pessimestic side, but solar and Beanie.
Since you don't know me I will say I did bust out laughing, and never take offense, as I'm grown man and can take verbal critique smiling.
I will say your bottom picks uncanny as been reading quite a few cyclists that don't match your deal. Anyway still think big money in shale but never stated savior to world economy, but would be happy if it was. Still laughing as type, but T+J has valid point money there.
Funny thought was directed at me Gary, More probalble T+J, anyway still had me laughing at the thought.
ReplyDeleteDanno,
ReplyDeleteNice SPX call. Did you take any profits yet? I'm still long UUP calls and EUO.
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ReplyDeleteWonder if the multiple downgrades are baked in. Word was out early on the possible France downgrade. Doug Kass tweeted the possibility on Wed. But 9 Euro zone downgrades! IDK...Tues should be interesting.
ReplyDeleteFull S&P downgrade list:
http://thechartpatterntrader.blogspot.com/
Wav,
ReplyDeleteThanks. Made a few bucks long PMs but nothing to write home about. I'm mainly focused on jockeying for position before the next big move.
The odds seem good that anyone long the dollar is going to make money, if you're willing to suffer through a short term pullback. I'm staying away from options though, as things are taking a bit longer than expected to pan out. It's too maddening to be correct and still end up losing money.
Wav,
ReplyDeleteTo answer your question I am not long anything at the moment (aside from the old turkey account). I'm building a modest position in ZSL but not going crazy as there could still be more upside for $SPX before any potential rollover.
t and j
ReplyDeletei woke up this morning with a horrible sense of remorse for my posting yesterday and i feel the need to issue a mea maxima culpa
for starters, i need to apologize to you once again for my unprofessional and inappropriate post. sometimes one’s emotions get the better of oneself and it leads to really stupid actions. i posted out of anger and frustration over what i perceived as your condescending exchanges with many on this board. i justified my actions to myself as defending others that were subjected to your posts. well, i can only say that i was wrong in my thoughts and in my actions. it is never acceptable in any circumstance to attack a man’s character or his livelihood, especially when one does not have all the facts. you are right, i don’t know you or anything about you other than some snippets gleaned off the internet. more importantly, i don’t know you as a person, yet i presumed to have you all figured out. for that, i am truly sorry.
i made the comment that you needed to look inside yourself to explore the void that existed, when it was i that probably should take that advice. perhaps i need to explore my own insecurities that led me to write such a nasty post that was really out of character for the person that i believe myself to be. you’ve proven yourself to be a standup guy in accepting my apology yesterday, so i can only hope to match you by reiterating my regret over this inexcusable lapse of conscience.
well, i’ve said my penance and hope there is no ill will. God bless.
Intresting article on the COT for gold and silver
ReplyDeletehttp://www.marketoracle.co.uk/Article32518.html
86d4life
ReplyDeletethe results are not invisible, only their methods. the result is that treasuries retain a bid and the government continues to have the luxury of financing at artificially low rates. their method in doing so? well, that’s the million dollar question.
IMO Tim and Jeanene is right about the USA prospect. For some reason people on this blog from the first day I got here think that one can compare USA situation with Euro zone situation even with Greece (?!). People are also for some reason obsessed with USA debt which will be taken care of with a little inflation and somewhat slower growth (no depression needed). However Tim and Jeanene, similar to a majority of people here, do not realize how bad the situation in the Euro zone is. The problem is that not only the situation in the Euro zone is bad but that it is not curable because the whole system is wrong. Further integrations will just make things worst, one should look at the MMF's PIIGS debt projections for 2015. The United states of Europe could theoretically be a solution but that can not be accomplished in reality. There is no way gold bull could be terminated with Euro zone still alive in a present form.
ReplyDeleteZ1,
ReplyDeletecan't see the big difference between EU and US problems. Both financial systems are rotten to the core. You guys have the reserve currency, but for how long? IMO it'll be gone sooner than you think. This way it makes sense for EU to swap a lot of dollars, maybe within a few years we'll pay the US back for a cent on the present dollar. Easiest way out 'll be to print like they haven't print before. Though I have to admit US has military muscle, I guess that's the only thing keeping USA in the front seat for the moment.
Hey Mike -
ReplyDeleteThanks again for sharing your heart. Know that it is your own conscience that is building you into a good guy at this point, I truly appreciated and let go after yesterday. I have been forgiven much more that what I need to forgive you for. That was easy.
Trust me, I have done that plenty of times in the past, and may do it again. Therefore I am not somehow above you or anyone. I am just as guilty. It's a hot topic. How do you think I learned what the word ad hominem meant? :)
I promise there is no ill will, and your response afterward shows the true character of the man that you are. The previous post just gave you the chance to show it. Rest in that.
Now, what about shale gas?
;)
Riley,
ReplyDeleteMy comment was directed to T&J with his shale obsession.
T&J, The estimates I've read about oil from shale require oil prices to be very high to make the shale fields economically feasible. No way will this provide cheap energy for the future. Natural gas, OTOH,definitely could provide cheap energy for decades but the infrastructure needs to be revamped. BTW, if you want respect on this board why not post your funds 5 year performance report. $ 60 million is not a large fund and should be able to have some eye popping returns with the right person at the helm.
ReplyDeleteStayed up all night reading about Rounding Bottom chart patterns.
ReplyDeleteFeel greasy.
I doubt you're going to make any sustainable profits by trading chart patterns.
ReplyDeleteThat's what you're for Gary! I'm just using patterns to dial in my timing a bit and help with expected price targets. I think your cycles system is the real key.
ReplyDeleteFor those interested in the debate between Gary and T&J over when debt becomes unsustainable there is an excellent presentation by CiavaccoCapital "Eurpean Debt Crisis Explained". It runs about 35minutes and was done in mid to late December. It can be found on YouTube or CNBC.
ReplyDeleteIn my previous post, I referenced Basil when I meant to reference Beanie. I'm afraid I have'nt studied Basil enough to have an opinion.
Mikezza,
ReplyDeleteThanks for the response. Understood.
Would'nt the method be buying north of 75% of all new treasury debt to compensate for lack of private demand? This may be kind of shadowy, but not exactly invisible.
ReplyDeleteAlso apropos aforementioned debt debate: Today's (Saturday) Business Insider "A Question for Paul Krugman"
ReplyDeleteSpeaking of Krugman.
ReplyDeletehttp://www.safehaven.com/article/23738/mainstream-economists-monetary-insanity
http://www.youtube.com/watch?v=4pCwE_-J--g
ReplyDeleteOne just needs to watch from 4:30-5:30. Whatever happens there is no way for the Euro zone to stay in the present form. If Greece leaves, meaning if the let it go to default and devaluate, then the next step could be the Euro splitting into two Euro-s.
http://www.youtube.com/watch?v=i1KjmkBNsHA
ReplyDeleteIn this debate they mention it all, the causes, the possibilities etc.
Sorry for posting too much but here is a very short clip about the Euro zone problems affecting the world, very short and accurate:
ReplyDeletehttp://www.youtube.com/watch?v=fd_ihO28pgU&feature=related
JPM head finally acknowledges that his bank will have huge losses in European sovereign debt. I think this will be the start of massive inflation as large holders of money will start to invest in private assets going forward.
ReplyDeleteIt's possible that money will continue to flood into US Treasuries and that this UST bubble will burst just before gold reaches its peak.
ReplyDeleteAgain, this is what Exter seemed to believe (above) and he was no gold bug whacko. UST are just above gold in his pyramid theory.
ReplyDeleteInfo on Proshares K-1
ReplyDeleteWhen can I expect to receive my Schedule K-1?
We generally expect to mail Schedules K-1 in mid-March. We have to gather information regarding ownership interests bought and sold during the year from the firms that sell our products. Once received, the information must be reviewed for accuracy and processed, and only then can we print the Schedules K-1.
Gold plummeted through a 3 year trend line. Even if gold rises to 1700+ I would not get too excited. Symmetrical Triangles experience Pullbacks to the breakout price 59% of the time on downward breakouts. In gold's case a Pullback should not be a surprise. It should be expected. Technically, Pullbacks complete their rise within 30 days. January 11th marked 30 calendar days. That's not to say price cannot Pullback even more after 30 days, but technically speaking, you're not supposed to call them Pullbacks after 30 days.
ReplyDeleteNote that I drew this chart showing the expected pullback weeks ago (including the dotted lines). I have not altered it since.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=1&mn=9&dy=0&id=p71062551266&a=241643000
Not trying to say what will happen, because I don't know for sure. But the statistics suggest that gold longs should not get overconfident here.
This chart shows the broken trend line.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=3&mn=11&dy=0&id=p26989721386&a=253184115
Mikezza,
ReplyDeleteOut of curiousity, were you asking the question about additional easing because you believe it is now occuring but are unaware of how it is being done, or do you have some idea and are just testing others? It is kind of a trick question, but based on your posts, I have a feeling that you are aware of that.
Regarding the Dr Ed comment,are you an old Prusec or DB guy? Are you still in the business?
Riley,
ReplyDeleteCurrently long.
"RJ,
Exactly. I start the short with 1 contract, if im confident with the move I will add on the way down. Today's short at $1660 I was a bit hesitant to add on the way down because the 200dma is right here and I was anticipating a bounce off it, just now I seen the bounce and covered my short and went long. Now I captured this bounce, when I see that its getting toppy, I will take off the long."
January 12, 2012 8:33 PM
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ReplyDeleteThis comment has been removed by the author.
ReplyDeleteSince 1/4 we have a 10dma Swoop in effect which has supported this move higher three times in this DC.
ReplyDeleteNow the second time during this IC, gold is holding above the 10dma late into a new DC. This would typically be indicative of a First Daily Cycle of a new advance (A-wave in this case).... Only during the 08' D-wave, has this not been the case. The 08' D-wave had two DC's that held above the 10dma for more then 10 days into the cycle before breaking to new lows. This D-wave, like the 04' and 08' D-waves, was a failed IC and exibited the same type of behavior having moved above the 10dma for more then 10 days during atleast one of its DC's, before continuing to break to new lows.
If this D-wave were to play out similar to the 08' D-wave we will see gold move back below the 10dma in a day or so, failing to make a new high and most likely another left translated DC breaking to a new ICL.
But if gold is indeed in a new first daily cycle of an A-wave, and playing out similar to the move out of the 04' D-wave, we shouldn't see gold move back below the 10dma before making a new DC high, and before it dips into a DCL. The 10dma would continue to support the move higher into a right translated daily cycle.
WW - really enjoy reading your last post about gold's behavior relative to the 1st daily cycle.
ReplyDeleteI think some poster will say that I am kissing up, but whatever.
ww,
ReplyDeleteSo do you thing the bottom in gold is in?
"Many wells are unprofitable because gas is being drilled (irrationally) at low commodity prices to hold leases on a deadline. Unfortunately, now that rigs are migrating away from the Haynesville Shale, it is unlikely that the supply/demand dynamic will change much because the great hunt for liquids, especially in places like the Eagle Ford Shale, has the collateral damage of producing natural gas a byproduct. It may not be in the same quantity as the Haynesville, but it is coming to market as a secondary product regardless of gas prices."
ReplyDeleteNew York Times: Insiders Sound an Alarm Amid a Natural Gas Rush
http://www.nytimes.com/2011/06/26/us/26gas.html?_r=2&src=me&ref=general
Z1: Re. YouTube, Warren Buffet babling incoherently to Charlie Rose is rather revealing, but this particular installment on his political protection policy is the equivilent of a bounced check.
ReplyDeleteFarm Girl -
ReplyDeleteThat is all well known actually. The key is that companies see the massive source, and are producing factories and plants near and in the shale area. A new source of demand is now at the cusp of changing the dynamics of America. When they do slow drilling down, prices will go up, making it more economical to drill again, thus pushing prices back down.
The vast resource that is local shale is beginning to create a potential ceiling on the price of gas. Without it, who knows how high gas prices would go if we were faced with limited supply. Supply is not long an issue now, only demand. And the proof shows the demand is being created by the plants and factories moving to the shale areas.
Keep in mind NY Times is very anti-fracking as well. Environuts, so most articles linked to fracking are written through a very biased lens. Careful what you believe is actual, factual truth.
As well - I have read most of those emails..... note they mostly refer to nat gas. Nat Gas from fracking right now is a money losing proposition. Which is good for America at the moment because it means their heating bills are lower because of low price.
ReplyDeleteMost of the activity in fracking right now is being down on liquid rich regions of the shales. Look at North Dakota. The Bakken now produces more oil per day than some small OPEC countries, and that is going higher. If you look at the drilling going on in Texas, most wells are being drilled in the liquid rish areas, while the gas only or dry gas areas are being neglected. These are all positives.
Anyone looking at NatGas . WOW how low can it go. Got to be close to a bottom
ReplyDeleteT and J,
ReplyDeleteYou're talking out of your ass.
Please take a look at the nat gas chart and don't embarrass yourself.
James -
ReplyDeleteYou are talking out of your mouth, which stinks just as bad....
I know Nat Gas is low, and THAT is the reason the shale plays are moving to liquids, not nat gas. BECAUSE nat gas is so low, and there is an endless supply, companies are opening processing and cracking plants to these areas BECAUSE the input costs of Nat Gas are so low.
Maybe you should be slow to speak, lest we get confused which end the diarrhea is coming from.
This whole thesis of the revolution of American industry it based on the fact there is ample supplies of energy that will cause the prices of input costs for manufacturers to be LOWERED.
ReplyDeleteLower energy prices is the goal James. Didn't think that one was so easy to miss, but you figured out a way to do it.
T&J,
ReplyDeleteThere is no energy revolution coming, no matter how hard you believe your own delusions
give it a freaking rest.
awwwww - ok......\
ReplyDeleteThat's the best you have? Your opinion and conjecture after supposedly showing me "proof" of low gas prices?
Ok... because James said so, I will give it up and give it a rest.
Thanks for setting me straight on the truth.
Bottom line is you don't like my ideas, because they don't go along with your thesis of massive inflation in the face of a collapsing country. If I am right, your "trade" is in danger, so you feel the need to attack my idea by making it personal.
You have a lot to learn.
"awwwww - ok......\
ReplyDeleteThat's the best you have?"
Really? Come on, can we up the quality a little bit here? Taunting?
Let's hope what's going on in Daneric doesn't happen here. What a waste.
Wow Sang - you're not biased or anything are you?
ReplyDeleteYou find it totally ok for James to write this:
"T and J,
You're talking out of your ass.
Please take a look at the nat gas chart and don't embarrass yourself."
Why don't you get a bit more consistent with your high road and call out your own team members for the way THEY are writing?
Oh yeah, I forgot. It's because they agree with your thesis, and I disagree. Therefore, I will always be in the wrong.
Stunning.
eelseth --
ReplyDeleteThere is some basic book on Hurst cycles, which is called "The profit magic of stock transaction timing" by J.M.Hurst. Also, you can look at youtube for "Hurst cycles".
Another source is Amazon.
What kind of use do you get from OminTrader Re: Hurst cycles?
"Wow Sang - you're not biased or anything are you?"
ReplyDeleteRelax, I simply didn't read the entire thread because I didn't want to read all the bantering back and forth.
Your comment happened to be the last comment which was why I quoted it. The other comments you bring up are just as bad or worse.
The point I'm trying to make is that the content in general is degrading and it is getting harder and harder to find the few gems hidden among all the BS.
rjm,
ReplyDeleteif the fed was buying 75% of new treasury issuances, you would see it reflected on their balance sheet since their purchases and holdings are pretty transparent. besides, the fed does not typically purchase newly issued bonds directly from the treasury for their own accounts which would be direct monetization. instead the fed buys previously issued treasuries for their own accounts directly from the primary dealers during open market operations or episodes of qe. again, all of these transactions are very transparent so the market wouldn’t be left wondering what was going on.
Lower energy prices are a fantasy. Every utility in the country is trying to pass along price increases to consumers. Our power generators, nuclear power plants and power grid are all old and need to be replaced to the tune of hundreds of billions of dollars. There is no "magic" way to get energy to consumers for less money.
ReplyDeleteFarm Girl -
ReplyDeleteI forgot to mention that there was a follow up in the NY Times a month later - where some push back was given:
http://www.nytimes.com/2011/07/17/opinion/sunday/17pubed.html
Always two sides to a story indeed.
WW, you still long?
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteAt ease,
ReplyDeleteYes I'm still long from the 200dma.
Ok, thanks, checking back. I got out yesterday with profits at 1631, as I couldn't watch the last two days. Will wait for another clear entry.
ReplyDeletepst
ReplyDeleteif you are insinuating that you one needs to consider the ultimate demand for treasuries, then yes it was a trick question. anyone who claims to understand monetary policy though should at least be able to suggest possible policy actions that would allow the fed to continue to provide or encourage additional liquidity while avoiding the outright expansion of their balance sheet. i can’t see how someone can claim to have an investment opinion on treasuries if they don’t understand what’s happening first.
INDU CYCLE
ReplyDeletehttp://traderjoed.blogspot.com/
This comment has been removed by the author.
ReplyDelete