Silver Explodes As DJIA Closes Above 13,000
After 22 crosses yesterday, and 12 more today, the Dow managed to close above 13000. Transports were lower but less so on Oil's modest retracement (though the Brent-WTI spread remained around $15). While stocks closed modestly higher, volatility and correlation markets remained considerably higher than would be expected and along with quite considerable relative weakness in HYG (the high yield bond ETF) into the close as well as a clear up-in-quality rotation was evident as investment grade credit outperformed notably (not exactly a high-beta risk-on shift). Apple's meteoric rise helped drag Tech to first place overall today and also YTD followed closely (YTD) by financials both up around 14%. The last week or so of slow bleed higher in stocks has notably not been led by a short-squeeze in general - based on our index of most shorted names - but as is becoming more and more clear, divergences (and canaries) are appearing all over the place but we suspect can be traced back to Apple in many cases for its over-weighting impact. Treasuries slid lower (higher in yield) after Europe's close but remain better on the week and modestly flatter across the curve. Aside from a hiccup around the macro data this morning, EUR pushed higher all day against the USD shifting into the green by the US close as JPY stabilized. The USD weakness helped Copper and Gold leak higher but Silver was the massive winner, now up an impressive 4.3% since Friday and 30% YTD as WTI lost $107 and is now down over 3% on the week. The IG rotation coupled with vol decompression makes some (nervous) sense heading into the LTRO results but it seems the new safe-haven trade is Apple (whose option prices are now the most complacent since early 2009).
12 more crossovers today and finally we get the much-heralded Dow 13000 close...
with stocks overall led by Apple (tech) and Financials both of which overall remain the best performers YTD...
...but while stocks limped along in a narrow range on 'average' volume, investment grade credit rallied handsomely this afternoon and HYG (the high yield bond ETF) sold off quite significantly (relative to the risk-on sentiment in stocks)...
...and while VIX managed a small down day, overall the vol trend is negative or less exuberant than stocks would infer - especially if we look out across the term structure and wings of the vol surface (and implied correlation)...
It would appear that the momentum-driven excitement has slowed this last week or so and much of that seems to be due to the short-squeeze fanaticism being largely wrung out. Our most-shorted index (in which we took profits) has pulled back to 'fair' with the overall market (orange oval) since inception suggesting much less squeeze pressure (of course that is outside of AAPL).
...and while Treasuries leaked lower (higher in yield) this afternoon and the USD also leaked lower driven mainly by EUR strength, the dispersion in commodities was again the big story with Oil dropping considerably on IAEA chatter and SPR rumors and Silver exploding higher on, well who knows other than high beta catch-up ahead of the LTRO perhaps.
Charts: Bloomberg
Bonus chart: Apple's option prices imply the most complacency with regard to downside concerns since May 2009. This chart tracks short-term and long-term options prices implied distribution skew - i.e. how different from a normal distribution are the prices of Apple's options saying its expected returns are going to be... the answer is - the most skewed to the upside (with little concern for downside) in almost 3 years. As an aside, the kurtosis (or fat-tailed expectations for long- and short-term are in line - often a sign of a trend stalling).
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Silver bitchez!
Bullion Bitchez!
Apple is a bubble, bitches!
Stages of a bubble:
Linear Uptrend: Smart value investors and arbitrageurs accumulate safely at below below fair value prices (well below $5 for silver)
Speculative Mania: Self-righteous libertarians start betting dangerous amounts of money while spreading increasingly elaborate conspiracy theories to justify their obsession
Total Euphoria: Greedy and delusional amateurs scramble to get their hands on every ounce in an effort to satisfy their insatiable self-indulgence
Initial Sell Off: Annihilation of the ravenous and suicidal lemmings who have by now been totally possessed by greed
{We are here} -> Bull Trap: Die hard silverbugs pump what is left of a dying market which sucks in the last of the pack
Capitulation: Total obliteration of the remaining rabble
MDB - You are here:
Total-Linear-Thinker-Mania
I'd say much of the move today in silver was JPM and HSBC covering their shorts - so who are the evil speculators again? But many have stated that once $34.50 then $35.60 Ag is breached, look out.
If you simply think for a moment why a large bank would short PM's in the first place (during a period of the largest central bank balance sheet expansion in HISTORY) you come the the rational conclusion that they are complicit in the collusion to keep a lid on the currency debauchery, so the debauchery yardstick (PM's) need to be kept down. The proof is there, yet yellow-bellies like the CFTC seem to be intent on ignoring the blatantly obvious.
Either that or they (like MDB) own Berkshire stock.
I don't want to come across as condescending to MDB, but I thought I should clarify for the record what the real stages of a bubble are. It was Jean-Paul Rodrigue from Hofstra University who came up with the graph.
http://people.hofstra.edu/jean-paul_rodrigue/images/Manias%20Bubbles.pdf
I believe we are just exiting the Bear Trap.
Good one by MDB today.
MDB seems genuine in his posts but there are some folk here who think that his posts are really subtle sarcasm. I'd like to know if MDB considers his postings as subtle sarcasm or real insights. If it is sarcasm, then he is doing a dis-service to the newbies who might be struggling with this awakening. He gets so many down arrows that, if he is being sarcastic, his delivery needs work.
MDB, if you are for real and truly believe this then there is little we can do for you as you have been posting the same tripe for ages. If not, then let the unwashed in on your little joke.
MDB is a breath of fresh air @ ZH!
Long live Israel!
http://thespiritoftruth.blogspot.com/2012/02/dow-13k.html
MDB posts, like fine wine, are better on days when -
A- You have got three or four drinks in you
B- ZH threads start with "Silver Explodes"
Long Live Israel indeed!
I laugh at the beastly Goyim and their futile attempts to hedge against our global Zionist monetary empire. Relying on barbarous relics to preserve wealth, little do they know the Gentiles we allow to live in the upcoming decade will need an RFID chip to conduct any transactions.
Let me say this very categorically. You talking monkeys cannot change centuries of planning. We have subverted and control every major economy in this world through, biribery, blackmail, and vicious psychopathy. Your masses of socially engineered mouth breathers will die or submit.
We are the Learned Elders of Zion!
MDB is all sarcasm, all the time.
MDB's fatgina needs a trim
Somedays are better than othrs for MDB. He was a little serious for the new reader.
Unfortunately, it may be more insidious than sarcasm. Disinformation for hire, perhaps?
They're my thoughts. I believe that he writes this drivel in the vein of preposterous hyperbole. He never seems to reply to questions about the rectitude of his posts. Therefore the only conclusion is that he is a troll or one of the most myopic dolts to visit these pages. His postings are triteness wrapped in a cloak of deceit and have been refuted by others and yet he continues. Stubborn to the core, blinded by the light. As an unanswered enigma, entertaining comic or insideous troll? ; he only leaves his postings open to question and taken with a grain of salt.
I agree. I feel MDB is dangerous. If he indeed intends to lead with sarcasm that is fine. But there are newbies that are trying to part through the BS. He has never validated the sarcasm belief. Therefore, untill he claims otherwise we must take him at his written word.
The noobs will just have to put their critical thinking caps on and come to their own conclusion over time.
one person's noob is another's sophisticated investor
Dangerous? WTF?
The desire to silence others is what's dangerous.
I don't believe anyone has suggested that. WTF are you on about?
My reply was to LB's post.
To directly answer your question, I take issue with characterizing someone as "dangerous" because he espouses ideas that are un-(fill in the blank) to a self-appointed judge. That type of BS is how we've allowed the PC crowd to mire us in concepts like "hate speech."
We have come way too far from the mindset of "I may disagree with what you say, but I will defend to the death your right to say it."
With fiat currency creation going to infinity, why would there ever be a final down leg back to a mean barely above pre-bubble prices? This chart must assume stable money, which is definitely not what the future holds.
In any case, this is not about bubbles. The value of PMs is not going up. The value of the dollar is going down. From $35 in 1971 to $1775 - the dollar is down 98%.
Intitutional investors are just starting to notice.
"Either that or they (like MDB) own Berkshire stock."
Uh, people that live in their mothers basements don't own stock. DUH!
MDB may well have a point. All fiat currencies go to zero. Gold and silver as stores of value go up to infinity in terms of the old fiat. But neither journey is without its bumps. I suspect a big bump is coming.
Too funny.
You're describing aapl to a tee major douche bag. Well done!
Hey MDB, what analysis did you use to arrive at a fair value for silver at $5?
I didn't say fair value was at $5. This would simply be a common sense entry point for professional arbitrageurs seeking fair value at four times mining costs. This is currently around $18.
Scintillating silver sees common sense consensus commencing senseless common cents.
easy for you to say!
4:21 Aspergers does it every time
So, the only value that silver has is the cost to dig it out of the ground?!?
Yes, because the Ricardian Labour Theory of Value is not full of fallacies.
Well said! Big dollar-believers like MDB use a common tactic -- they begin their logic with an assumption that gold and silver are only worth some ridiculously low amount. Then, based on that assumption, they come to some ridiculous conclusion. When you ask them to explain the analysis behind their initial assumption, they never can.
MDB is just a troll. The true crime is that Keynes himself built his entire flawed theory up around the Ricardian Labour Theory of Value.
His "work" is entirely full of holes, but conveniently written in an almost decipherable way. Hardcore socialism doesn't want you to understand its true principle.
You sound like you could be one of those "self-righteous libertarians" that MDB mentioned. Don't those pesky libertarians realize that they are best ruled by their superiors in finance and politics? Why don't those libertarians consent to being ruled and told what to do and think like everybody else? Are those libertarians all so self-righteous that they actually believe they can be self-reliant and independent and free? How impertinent of them!
See, MDB. That's sarcasm without the need for the <sarc> button.
Unbelievably, central planner who disagree with libertarian principles like to brand them with the 'fascist' label, despite the obvious irony.
Ricardo aside, I have trouble assimilating the economic postulations of a man (JMK) whose entire argument is the ultimate liquidation...death.
Multiplied by four, apparently ; )
Pay attention!
(sarcasm)
(Just in case anyone thinks I'm agreeing with this loony/ master of wit)
So, you're saying that since my DCA is $15, I don't have to lose sleep over it? Heh.
You already got yours, right?
Now you are clearly paying attention!
I reckon you only have to worry if the alleged cost of digging it out of the ground (not really relevant to anything since most mines which produce silver produce it as a by-product, but let's play along with MDB on this one!) drops to $3.75 or lower.
Maybe you should worry if the minimum wage drops. Or maybe you should worry because in some of the mines which produce silver as a by-product there is no minimum wage. I'm a bit fuzzy on the detail, but if in doubt, worry.
"common sense" - well their you have it - what is completely missing since the beginning of 2000 is common sense in regards to world economics. We have gone down the tracks like a run away train - the engine has been able to maintain control of the attached and following cars so far but a lot of turmoil has been seen on the journey and the light at the end of the tunnel is not daylight but an on coming train.
But cost plus pricing is very rare. Supply and DEMAND are how prices are made up.
Isn't AG more of a roller-coaster ride than just that?
Going from 1.30 to 50 back to 5 back to 50 down below 30 up to 37....
And tomorrow?
Guess what MDB? Who cares? I've made enough trading in and out of SLV, that even if it goes to zero, I'll still have an amount in physical that well, leaves me very happy indeed! ...ROTFLMAO!!!
its confirmed you are a troll but none the less you are 400+% to low for the number you use as the end of the linear uptrend. 5 dollar silver will be remembered as the days of free silver
MDB, whether you ackowledge it or not, you are just as important here as Tyler at this point.
"slaughterer"
The pressure of something is getting to you.
For some, taking a long vacation works best.
DELIRIOUS!!
Sometimes I wonder if the Mathmans' and the MDbs aren't td HIS self just to give some counter-point else we would just agree 100% on everything here?
FRNs are a ponzi.
We escape the ponzi trap with pm. Sheeple are just rabbits and beyond redemption
Exactly, he is a creation.. I when more noobie than now not that I've graduated would have read MDB a few times and dug in and deciphered it. The new noobs will have to do the same..
recognized, nearly. Important, not by orders of magnitude.
Now, it is not my intention to demean MDB, but rather simply to tone down your hyperbole. MDB's skill and persistence at crafting these official-sounding newspeak nuggets bring an invaluable discussion from which most will take something home, and in which many will test their rhetorical mettle against statelike twisted logic and propaganda.
However, MDB's contrarian and contrived sarcasm/trolling style is neither original nor uniquely insightful; the ease with which his sarcasm is constantly destroyed by many of the fight club regulars demonstrates that the topics he discusses are already mastered areas of knowledge; he does not usually foster threads of original inquiry but rather forces people to restate previous understandings. This is useful for newcomers to grasp the all-around memetic content of the club but is not irreplaceable - I'm sure that many other people here have a similar grasp on things which would be sufficient to take a similar contrarian take. (I do not imply I'm one of those, it is quite common for me to take something home from the subthreads he generates)
Again, what makes MDB unique is his skill, persistence and consistency at applying contrarian newspeak to various ideological positions.
SLV : Parabolic Bullish Bias in effect, $50.50 initial objective. Silver equities to follow.
older article
http://www.scribd.com/doc/81117854/Naked-Swan-Trading-AUG-21-2011-Silver-Equities-Outlook-for-2012
Hey Multi-Delusional Bonehead, when you gonna say gasoline is a bubble?
Average February Gas Price At All Time High; Follows Record January Gasoline Costs
First, what do libertarians have to do with anything?
Second, the bubble is a bubble of created dollars and euros. Is the supply of dollars and euros expanding or contracting?
Third, gold and silver aren't just commodities, they are money.
Fake MDB. You are a pale imitation of the original, loser.
All this assumes of course that a Dollar in 2000 (when Silver was $5 an ounce) is the same as a $ today. Were that to be the case, getting out of silver would be a no brainer.
But consider the prices of a large variety of raw materials and their prices since 2000 and silver does not look so expensive any more. How has silver done compared to oil, for instance? Back in the late 90s, oil was $10 a barrel promting the venerable Economist to say that the world was drwoning in the stuff. It is now at $120. raging sell? We'll find out.
We're ALL bitchez!
Mondo Cane
Argentum Caniculae!!
Hi Ho Silver - away!
(Lone Ranger and Ace Ventura)
Declaration of War on the United States Government.
We don't want to destroy government. We want to fix it.
TRANSCRIPT
____________
To the Citizens of the United States and the United States Government.
We are Anonymous.
In the past few months, our collective has been organizing the operation known as Operation Blackout. Part of the operation's purpose was to alert the people of the coming bill that was to be called the Stop Online Piracy Act.
This Act would give Congress the power to censor any internet website they wish without consent from the Citizens of the United States. This act would've also had the power to jail any person who infringed on its new copyright law for an equivalence of five years. This copyright law would've had the power to destroy social networking sites such as Facebook and YouTube. Video gameplay and free movies would cease to exist.
However, Operation Blackout was a success. As a collective, we've managed to spread the word and alert the masses. Internet giants such as Google, Wikipedia, and Reddit became hand-in-hand with us as we all managed to make an impact on the decisions of our, "free government". But as we've seen with Megaupload, the government may not need a bill to be passed to get their way. Other operations we've conducted over this time period have awaken the people to the nightmare that is the United States Government. Sections 1031 and 1032 of the National Defense Authorization Act have been ratified. Yet we face new threats.
The United States Government is seeking to pass the Cyber Security Act of 2012. This act is as Orwellian as it sounds; it will endanger our collective and we will not stand by and watch while this government of lies prepares to take away our freedoms. The National Security Agency insists on labeling us as a leaderless, terrorist organization. The question is, "who do we terrorize?". Can it possibly be that the United States government is truly scared of us? Nevertheless, The time for action is now.
Our collective has realized, along with many United States citizens, that the current government is no longer functional. Our economy is unstable, our representatives uncooperative, and our system, destroyed.
We are not calling upon the collective to deface or use a distributed denial of service attack on a United States government agency website or affiliate. We are not calling upon the people to occupy a city or protest in front of a local building. This has not brought on us any legislative change or alternate law. It has only brought us bloodshed and false criticism. For the last 12 years, voting was useless. Corporations and lobbyists are the true leaders of this country and are the ones with the power to control our lives. To rebuild our government, we must first destroy it.
Our time for democracy is here.
Our time for real change is here.
This is America's time, to have its own revolution.
Therefore, Anonymous has decided to openly declare war on the United States government. This is a call to arms. We call upon the Citizens of the United States to stand beside us in overthrowing this corrupted body and call upon a new era. Our allegiance is to the American people, because they are us, and we are them.
Operation V, engaged.
We are Anonymous.
We are Americans.
We never Forgive.
We never Forget.
To the United States government, it's too late to expect us.
REVOLUTION is here.
twitter.com/theanonmessage
http://www.youtube.com/watch?v=jAaCZWQndqA&feature=player_embedded
Gee, yet another false-flag attack on government that only provides them with a casus belli. What a surprise.
Internet kill switch test in 5... 4... 3...
I hope Anon has the minerals. I'm counting on the nerds and the military (not always mutually exclusive) in the next (r)evolution. +1
where's krugman??
Yes I know...I have been reporting on it all day long.
Go Silver!
http://alternative-economics.com/?p=1240
The Joe Wiesenthal equivalent title would be:
Wiesenthal translates to "the Uber Weasel"
Who cares what that sleazebag thinks. All he cares about is clicks. His bonus depends on it.
Just realize "clicks" and "dicks" look quite similar when you're further from the monitor. Both work, when it comes to Weaselthal. The guy is a complete man-whore.
Started buying Ag around $5/oz.
I sleep very well at night... and I've been unemployed for almost a year -lol
I just dig it out of the ground myself for that price.
But you must be starving since you can't eat it
http://groundsforappeal.ihookitup.com/starving-billionaires-in-desperate...
+1
I'm getting so ridiculously fed up with all the "you can't eat it" remarks from the fiat hording sheople out there. What fucking idiot would want to eat his store of wealth? The purpose of storing wealth is so that you can afford to buy food when you need it. How did we ever let that stupid meme perpetuate? - damned trolls.
Recognize sarcasm, friend.
Recognize that I said "+1", and then went on with my own rant, friend.
$4.65 here, you beautiful bastard! It's nice, eh? I only did 1400 oz though. :( Still nice. :) Until that boating accident . . . dammit.
:)
Didn't hear much about it from the MSM Talking Heads. If it had been a stock increase like that, they would've jizzed on themselves, right there on camera.
I like it best that way. Wouldn't want any of the idiots on CNBC pushing AG, that would practically be a death knell. Of course, they would be playing the bull run with SLV.
Oh, I fully expect them to do this... the very day before SLV implodes from the circular logic of holding "physical" in the form of worthless Comex paper.
http://www.hulu.com/watch/47604/saturday-night-live-snl-digital-short-j-in-my-pants
All the canaries are dead, now we'll never know when we are in danger!
Don't worry, the government will tell you when.
Will be interesting to see how fast gold and silver catch up with:
- Mattress stocks like SCSS, TPX
- Restaurant stocks like BWLD
- Specialty retail stocks like NKE, UA
- Shopping mall REITS like SPG
- Big cap techs like AAPL, IBM
http://www.zerohedge.com/news/silver-explodes-djia-closes-above-13000#co...
Byoch!