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Has The Gold Bubble Burst? Either Way, Geithner Is Now Scroomed
A 4% move in 4 hours. At least with the gold bubble out of the way, stocks are fully apprised of what to anticipate. Somewhere Tim Geithner is congratulating himself for a strong dollar job well done. Of course, this does little to resolve the several trillion of worthless crap on bank balance sheets whose "value" just went in the non-FDIC preferred direction. And thus the Sec Tres is reminded why he is scroomed: there is no way out now - either jobs have to revert to trendline (the BLS would need to, ironically, hire humans over Kool-aid infused monkeys to do the next data analysis), or banks will be soon knocking on Sheila Bair's door, reminding that they were just kidding about that TARP payment. In that sense Napoelon Iceman Dynamite, Fred Mishkin is correct that gold is merely a sideshow.
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Sell it. Short IYR if you're a true believer. You can't fight the government rule changing (there will be plenty) and you can't wait out this cycle with an ultra ETF, they don't work that way. I think it is deep into 2010/2011 until commercial real estate blows up. You may be right, but you have the wrong instrument. It was like being a true oil bull and owning DXO (now defunct). It simply didn't work unless you were a skilled day/swing trader.
Since you averaged in, what is wrong with averaging out.
I recommend unwinding your long position over time (the same as you got in).
Plan 1: Just walk away. A 20% loss isn't that bad. After that, keep your eyes open for a really good opportunity to get back into the markets. The 20% can be made back.
Plan 2: There's no reason to think SRS can't gain at least some over the next week or two. Christmas sales have been lousy and winter is the worst time of year for real estate. Keep an eye on the S&P500. The unbelievable jobs report should have sent it on a path to 1200 but instead it fell from an opening burst for the third straight day. So it might repeat the pattern it's been following for the last four months and head down towards 1060-1070. If it does, you'll make back most of your losses in SRS. But get out quick then, because the downturn will only last 1-2 days (again, based on recent behavior).
Remember that inverse ETF's decay over time, so you should only choose plan 2 if you expect something to send the markets down (or IYR down separately) in the next 1-2 weeks.
+1
Thank you for the ideas. I will let you know how this turns out and I appreciate the advice. I admit defeat, of sorts. This market makes no sense to me and it's safest for me to unwind this, get out and enter when it makes more sense. My faith is shot.
But my faith here isn't. It's like a refuge. Thanks for letting me confess my sins.
Yes, ZH is a refuge--
Best of luck to you on this one!
This is a very cool site this way. Many of us have been burned as you have. Getting out at a loss hurts, but after some time, it feels better. The lessons learned from burns like this do actually make you stronger. I wish you better times in the future.
Ah yes, SRS my former lover. I didn't realize she was a FED puppet until all was lost. This is a trading vehicle only--you're 20% down. Preserve your capital and adopt a discipline. I recommend trimming your losses.
We had 5% drop after Dubai, today another 5% move. Clearly show that specs probably add about 5% to gold price. lets double it for fast longs and such... So, we talking 10% of the price is due to specs... Look at it this way 1100 +/- 100, sounds about right, so assume you are buy/hold/love/die type of guy and you have say 500-1000oz, so its 50-100K NAV due to specs? not big deal is it?
+1.
Also, note the premium on physical increases on these sharp drops. Paper sells off harder than the real.
Watch the US$. Over its trend line, for the past 7-8 months. Over its 50 Day MA.
If the US$ Bull runs, Gold could get hammered very hard.
Its all about having physical in my view. Precious metal ETFs are worthless pieces of paper just like 150 plus p/e ratio US stocks.
+1... and if you buy good bars or kilobars premium over spot is small <=$10, considering storage charges you pay to ETFs you better off buying physical, as first year storage charges very much cover premium you pay. Just don't buy numismatic crap and anything under <20oz
I hold my physical for savings and use the ETFs for trading. Just made a nice profit on a straddle at 1200 using GLD options.
http://www.shtfplan.com/forecasting/do-you-believe-in-black-magic_12042009
BINGO!!!
This from JSMineset:
HAHAHAHAAAAAHAHAHAHAHHAAAAAHHAHAHAHAAHAHAHAHAHAHAHA!!!
To all the Prechterites: Now go kick yourself for having EVER listened to such a total and complete idiot.
Sinclair also pointed out that $1224 was an Angel point (magnetic gold), and TPTB would make a bloody stand there. Called for temporary top at $1200 - back in MAY. Gold bitches!
How's your physical?? Bunch of w*nks!
Ah, Gekko. $40-50 moves with every 100 pip usd move. Your ignorant and arrogant gold chat is living on borrowed time.
You're just part of the latest 'this time it's different' crowd.
Wht to do with all that overpriced physical you bought when it hits $600?
Oh my God. I'm outside of the legitimate established dollar and I'm part of a temporary fad.
God is going to make me suffer and lose all my hard won gains. I should sell all my gold right now and run and put my money in a .25 percent interest bearing money market fund before I have to suffer his mighty wrath of monopoly reality. Please just make the shaking and shivering stop from my ill conceived rebellious acts. Please just give me your fear and let me make it my own so I can rejoin and we can both have comfort. Even though you beat me while I'm with you. You beat me twice as hard when I threaten to leave. Surely this dollar kingdom will last a 1000 years just like has always been promised.
http://www.youtube.com/watch?v=GFJpZdTdpMs&feature=related
Even my niece could have told you that it was time to shake the mother fucking sissies out, the BLS report is just as good as any other reason, could have just as well been my wife's menstrual cycle for all I care.... Next shakeout equities...
Econolicious
I think we see the gaps filled and a price between $1020-$1100 sooner rather than later. The 200 DMA holds, the ChiComs, Indians and Arabs thank us for allowing an escaped insane elf from the North Pole to serve as Treasury Secretary and when the S&P 500 craters early next year, and I do mean CRATER, the CRE crisis will be blamed on Bush and Reagan and Obamagod will order Benron to print as many trillions as necessary to keep his party in office and thus triggering the next bull leg in gold.
Sheesh. I love watching all the giddy Bubblevision hosts when they report on gold. Sadly they showed the same glee when pumping BSC and WaMu as they cratered while little old ladies had to switch their dinner plans from Fancy Feast to Old Roy because they followed their advice.
how about little bet.. I sell you 1m 1040 put at 10points. if you right u get 2:1 payout
I don't buy paper GLD, it's crap, physical only. However the 90 SPY puts are looking mighty interesting....
Misc tidbits: -Goldman targeted gold at 1200 and that's where it got to. 1400 comment yesterday was a bulltrap -Goldman targeted the DXY to jump 20% sometime 2 weeks ago. The dollar plunged but now it's up -The stock market and the economy are currently in 100% sync. The recovery will fail when the market fails and vice versa. -A lot of Labor's Employment numbers are based on these erroneous birth/death models of businesses -Unemployment number shocker is probably due to nomination problems of Bernanke and Obama's cratering numbers. It's the last number to really get juiced-and the market looks to it. Now, what happens? That unemployment number was "SOOOOO GOOD" that investment money ran to the US(as in it's now a bonafide recovery story.) That's a doubledged sword since Bernanke had been firebombing the dollar to juice the markets with the carrytrade. Now that there is a "real" story, the dollar zoomed and probably had shorts covering like crazy. Shortcovering will need a sell off of commodities and stocks and then we begin back at the crash...maybe
Me think that the carry trade is the side show,and the gold is the main show(unfortunately I don't have neither stocks or gold,but only cash). I yet to see one study discussing the dollar bull scenario on a fundemental basis. There is still a huge deficit,and I don't think any of the trading partner who peggs their currency to the dollar,are interested in buying tbs anymore. So I expect them to keep on converting their excess dollars into gold and other easily warehoused commodities,and the sharp drop in gold today is probably related to unwinding some longs on the comex. If you are in doubt,go with Jim Rogers for the long haul(he keeps on repeating that he is the worst market timer,yet he is vey succeessful investor).
Gold doesn't rise merely in response to real or anticipated inflation or a declining currency, it rises in inverse proportion to confidence that the sovereign has it's finances in order. As long as the government gives the impression that they don't know what they're doing, believe in magic and are borrowing money they can't repay, gold will stay up here or much higher.
Which causes people to flee the currency and their bond market. Especially for the US and UK, interest rates will rise ,driving bonds down. Therefore less dollar denominated assets will be purchased, driving the dollar down.
Gold is on sale folks. It won't last long. Back up the truck and load up while you can.
To the SRS Anon;
My advice to you is to sell to your sleeping point (i.e that point that allows you to not overly stress over it).
Take some off the table. Other trades are out there. Move on before you are REALLY in trouble. These inverse ETFs should not be held for very long (like, a day).
Discipline (or lack thereof) makes or breaks a decent trader. Just one guys opinion (who has learned the hard way).
JR
Thank you, I will post back about it. I'm pissed mostly because I had faith in REITs a while back 2-3 yrs and then took a major beating. I am trying to not make that same mistake again. Your advice is appreciated.
The discipline comment is the essence of trading. It gets beaten into all of us through experience. Not sure there's any other way to learn it. Just an aside, I have a method that allows for up to four-day holds of the leveraged etfs, but even four days is pushing it. Best of luck to you.
To cow, silver king, and gekko. I warned you yesterday and you all laughed said i had no money or could not earn money. Very foolish comments considering i am an old timer think t206 wagner 1909 s vdb bought 25 years ago. To spout such comments without knowing facts just shows me your age. Meaning you really do not know who you may be talking to on this board.
i googled and found some yahoo on a baseball card. fail.
what do you get when you google me?
okay, so the short dollar/long gold guys peed their pants and the deflation crowd might be capitulating, but what about inflation? This is weird. The only reason we are here is because the printing presses are going 24/7.
It would not phase me a bit if gold dropped to $700. It's the best store of value in USD terms for the next 5-10 years. The banks & the US are insolvent. Uncle Ben will create $'s via his keyboard & mouse until there's a currency crisis.
Plus, China continues to advertise buying gold/silver to the masses. See this link from a story from today...
http://www.china.org.cn/2009-12/04/content_19010999.htm
Everything that happens inside the U.S. at this point is a sideshow. Which country do you choose to guide your investment $'s, the U.S. or China? Make no mistake about it, China is in charge. If they would recommend buying pickles to their masses, then I'd put at least 25% of my portfolio into pickles.
Gold will be $5000+ in about 2-3 years. It's too bad a Honda Civic will cost $70,000 in the same time frame.
Anon #153248
...and just who's gonna buy a $70,000 Honda Civic in 2-3 years dipshit ???
Transport back in time to 1923 and ask a German.
"By late 1923, the Weimar Republic of Germany was issuing two-trillion Mark banknotes and postage stamps with a face value of fifty billion Mark."
Transport back in time to 1923 and ask a German.
"By late 1923, the Weimar Republic of Germany was issuing two-trillion Mark banknotes and postage stamps with a face value of fifty billion Mark."
the chinese?
While big banx can manipulate stocks,they can't manipulate comodities for the long run. They are the MM in the stock market,so they can artificially keep stock prices higher in the stock exchanges,even if there is no real demand. However,you can't keep agricultural product higher if there is more supply than demand,since farmers has to get rid of their product(and by the same token,can't keep the price low if there is not enough grain for example). And if there is high demand for gold,they can't keep prices low because the supplies of gold are limited. So manipulation in commodities can't last as long as manipulation in papers assets can last.
Heard a lot of comments here about hanging on to losers.
Set stops and stick to them. I've had a lot of "sure things" hit the downstop sure as hell the next day or so but I don't lose any sleep.
FWIW, I use an ATR multiple/Position Sizing calculation that works for me and I stick to it. If I get downstopped but still have some basic "affection" for the stock ( an "investment" habit I'm trying to break), I'll watch it for a few days and if it retraces with confirmation I may get into it again.
Remember you're a TRADER - not an investor, not a "speculator". All the info you need is on the screen in front of you. It's not in the newsletter, not on CNBS or even ZH.
Work your model, let your model pick your entries, set your stops, set your exits, and WATCH. This is more like fishing than hunting.
Didn't get a nibble though today.
"Trader Watches Screen
"More Like Fishing Than Hunting
"No Bites Today"
KptLt. laughing swordfish
9er Unterseeboote Flotille
great you are bad version of IBM PC... if you trade like this - computer will always win. Its cheaper, faster, better and doesn't have regrets, PMS or hangover... This is losing strategy in 21cent. It will always lose against machine...
Order:
You're right only if you are foolish enough to try to day-trade or intra-day trade against the algos.
I'm a strict swing-position trader working a very simple model for trend and band trading that happens to have worked for me. Thru COB today, I'm UP 23.7% for the year, including the fact that I've lost a bit this week.
I look at it like I'm playing poker against The Squid and he is dealing from a shoe with 100 decks in it.
I can win if I have a GAME PLAN and know when to hold 'em and fold'em.
The Squid even tells me that most of the other folks at the table have neither a plan nor a clue.
I'm ahead because I'm not greedy and I stick to what I know how to do. It's as much hobby as income to me - and I'm by no means rich.
Kpt.Lt laughing swordfish
9er Unterseeboote Flotille
good luck with this... just 2 things:
1. It's A Bull Market, You know!
"It did, and I am much obliged to you, my dear boy. But I couldn't think of selling that stock."
"You couldn't?" asked Elmer, beginning to look doubtful himself. It is a habit with most tip givers to be tip takers.
"No, I couldn't."
"Why not" And Elmer drew nearer.
"Why, this is a bull market!" The old fellow said it as though he had given a long and detailed explanation.
2. SPX up 25.27%
http://www.standardandpoors.com/indices/sp-500/en/us/?indexId=spusa-500-...
Any opinions as to why long treasuries tanked today while dollar rallyed and gold plunged?
I'll raise my hand and admit it - I was corn-holed by GOLD today!!
Are you sure? Relative to where I bought in, I was not. Losses, yeah...but that is different than having a sore behind.
If you are long enough, it doesn't matter.
Don't underestimate the feds,,,this is one of the most criminal enterprises in human history,,,and they have unimaginable power, don't get lost in that because they do....HAARP..
Manipulating markets to the form of trillions is easy.. As for me..
Some Dollars/Gold ^, straddle the possibilities keep your powder dry..somewhat
Has anyone here heard of the measure rule?? Gold was bought as a momo play and then sold at the target. Support lines up just under 105 GLD for the first level and around 99 for the next. if those break then the support is on the up trend line around GLD 80.
Example of the measure rule.
http://www.afraidtotrade.com/stock-trading-chart-patterns/62-triangles
This is one decending but the opposite occurs the other direction. It did it's over, at least for a awhile
ah, whatever, next week will be mayhem on gold and silver. I guess it turns 1350 on friday. What is going on? Who is responsible? When does the craziness stop? I dont know. But i know we are fucked cause of spending to much in bullshit, living la vida loca. No one gives a shit. This christmas is ruined for many people with money.
Boy, times have changed. I have repeatedly written that Washington is a criminal enterprise; I was labeled "anti-American". Now it is the consensus amongst the intelligentsia.
Germany's money printing was due to Versailles and its barbaric demands. Our money printing is due to Washington DC alone. This is a huge difference. In both cases America is largely responsible. This is our history.
What gold bubble? When it takes 3 oz of gold to buy the Dow I'll start worrying about a bubble.