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Capitalist Pig's Market Observations

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Capitalist Pig's Market Observations

 

#1:

Gold, Silver and the Stock Market are done here!

=========

 

Over the last two weeks, my stance on the whole market has become rather bearish.

 

The Facts

  • After a normal, and much anticipated correction which ended at the beginning of November, Gold has lost momentum at $1750, and fallen back to the November lows. There is technical damage.

  • The SPX has lost momentum very near the all time previous highs. It will take huge momentum to break this. Over the coming months and weeks, this will be obvious to all.

  • I see a number of market leaders (Apple, CMG, AZO,BIDU), are no longer leading. They are topping, and, or, have entered downtrends.

  • I see market laggers, such as RIMM, Nokia, and the Steel producers are basing and showing strength.

  • I have been inundated with newsletter writers stock picks recently. Most of these have been bearish for long time now. They have cracked!

  • $40Bn Stimulus/Month. Is this really enough? What's more, I do not see the FED's balance sheet expanding. I think this could be hot air. Anyway, Obama in office for four more years. So who cares about falling asset prices right now?

 

Charts to follow ...

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After a normal, and much anticipated correction which ended at the beginning of November, Gold has lost momentum at $1750, and fallen back to the November lows. There is technical damage.

:D

painting the charts. Really.

 

 

$40Bn Stimulus/Month. Is this really enough? What's more, I do not see the FED's balance sheet expanding. I think this could be hot air. Anyway, Obama in office for four more years. So who cares about falling asset prices right now?

 

see:

http://www.federalreserve.gov/releases/h41/current/

 

growing nicely...

3. Supplemental Information on Mortgage-Backed Securities

Millions of dollars

Account name Wednesday

Dec 5, 2012

Mortgage-backed securities held outright (1) 883,646

 

Commitments to buy mortgage-backed securities (2) 129,657

Commitments to sell mortgage-backed securities (2) 2,800

 

 

----------------------------------------------------------------

vs. a week ago:

3. Supplemental Information on Mortgage-Backed Securities

Millions of dollars

Account name Wednesday

Nov 28, 2012

 

Mortgage-backed securities held outright (1) 883,539

 

Commitments to buy mortgage-backed securities (2) 110,263

Commitments to sell mortgage-backed securities (2) 2,000

 

Cash and cash equivalents (3)

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Gold silver are still above a rising 144dma, so the long term up trends are clearly up.

Agree equities look like the long term trend could be rolling over based on the same indicators, but topping is a process that can take many months, and we may not even have seen the top yet. There is room for one final euphoric rally.

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Yesterday, the Fed announces an additional $40bn in Treasury purchases, and the market barely gives a Sh*t.

 

Why should it? It has already been anticipated.

 

We all knew the Fed would have to do it. There's more going out than coming in at the US Treasury. The shortfall would have to come from the FED.

 

The Stock market is topping, and it will take Gold down with it.

 

The only thing which can save Gold IMO, is some very bad news out of Europe (anyone know what?). Then we could see a situation similar to Summer 2011, where the Stock Market crashed, and Gold went parabolic.

 

I've not liquidated my Gold miners yet. Lets wait for confirmation of a breakdown in Gold.

 

I could also be very wrong on my forecast. Another scenerio might be if Gold drops to $1670 (the 144dma), and then rallies substantially. In this scenerio, I expect Gold to hit the 144dma, and stop flat, dead on. Any continuation will invalidate this forecast.

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Over the last two weeks, my stance on the whole market has become rather bearish.

leaders (Apple, CMG, AZO,BIDU), are no longer leading. They are topping, and, or, have entered downtrend

 

Larry P commented last night on the Bearish charts of: AAPL, GOOG, AMZN, etc

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Larry P commented last night on the Bearish charts of: AAPL, GOOG, AMZN, etc

 

Yes, they are setting up for excellent, low risk short opportunities. CMG, AAPL, and AZO in particular.

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I could also be very wrong on my forecast. Another scenerio might be if Gold drops to $1670 (the 144dma), and then rallies substantially. In this scenerio, I expect Gold to hit the 144dma, and stop flat, dead on. Any continuation will invalidate this forecast.

 

Nope. GLD has shot straight through the 144dma. Next stop is around 158 on GLD. This is a major pivot point. I do not know if this will be the bottom, but we can at least expect a large bounce.

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That's a Big ugly drop, but we are in a Seasonal Window now for a Gold bottom (in these days before Christmas)

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That's a Big ugly drop, but we are in a Seasonal Window now for a Gold bottom (in these days before Christmas)

 

I may have spoken too soon. It looks like GLD may close above the 144dma. There's certainly volume which is consistent with GLD wash out bottoms.

 

But, also consider the other scenerio, below ..

 

 

 

gold181212.png

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Maybe - but check THIS

and this:

gld.gif

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Lots of important technical support taken out today - 1685 recent low, as well as the 144dma and the 200dma was briefly breached. Horrible.

 

We have only been as oversold as this about 5 or 6 times in the whole of the last 5 years.

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I went moderately long. Priced closed above the 144dma. Would feel more comfortable if it stopped dead on (like it has done through 2010 and 2011).

 

I figure it's a low risk trade. Maybe only 15 point risk (gold price, not GLD).

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I went moderately long. Priced closed above the 144dma. Would feel more comfortable if it stopped dead on (like it has done through 2010 and 2011).

 

I figure it's a low risk trade. Maybe only 15 point risk (gold price, not GLD).

 

Not looking good so far. Gold futures have re-tested yesterday's low. Lets see if the bounce holds. If not, a quick drop to the $1630's look's in play.

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We have broken it before, and recovered.

 

I think if GLD holds over the 252d MA, it will be okay

 

I bought some GDX March $43 calls yesterday at $3.85

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We have broken it before, and recovered.

 

I think if GLD holds over the 252d MA, it will be okay

 

I bought some GDX March $43 calls yesterday at $3.85

 

There are a number of Gold Stocks at their 252dma too.

 

There is an avalanche of Economic numbers out today. It has to push the market one way.

 

I am seeing a number of conflicting signals. Hence, I exited my position.

 

I will be watching the market like a hawk today, with my finger on the trigger ready to buy back in.

 

Dr B, which period are you referring to, when you say it has broken before, and recovered?

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The 144d MAEven the 252d MA - see last December:

 

gld.gif

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Hey, CP:

 

Can I change the Title of this thread to:

"Capitalist Pig's Market Observations" - or something else you may choose?

 

I think it would better reflect the developing discussion here.

 

Several of our Regulars have Blogs, and you should too

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it's $40Bn /month too much and it's not a stimulus.

 

Yup. They've been trying to find the right amount of stimulus in Japan for over 20 years. It never occurred to them that in this case less is more.

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Hey, CP:

 

Can I change the Title of this thread to:

"Capitalist Pig's Market Observations" - or something else you may choose?

 

I think it would better reflect the developing discussion here.

 

Several of our Regulars have Blogs, and you should too

 

Go ahead.

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Opened lower below the significant moving averages.

 

GLD $158 and GDX $43.8 are the next major pivot points.

 

Could be there today. Or maybe tomorrow. 21/12/12, would be rather fitting.

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