GOLD

[G0ldfinger]

Jim Sinclair says throw your Technical Analysis out. I've never really believed in it first place.

 

http://www.jsmineset.com/

Posted On: Tuesday, September 09, 2008, 8:36:00 PM EST

A Level Of Market Intervention Never Before Seen

Author: Jim Sinclair

 

My Dear Friends,

 

I have fielded as many calls as any human being can. My first responsibility is to my corporate calls and they alone are beyond what any single person can handle.

 

You are all being run by the largest intervention in the shortest time frame any market on the planet has ever seen.

 

I am not your whipping boy so those who are wishing to use me as such cut it out. I am not opening any email from an address I do not recognize.

 

Today takes the gold ring for downright evil.

 

I have heard that crap about deflation and negative gold. Will you please click here to read the Formula and stop busting my balls? The synthetic dollar short is plain ignorance at a WORLD CLASS level.

 

I am not reciting to you what you refuse to read. I am finished with mean people.

 

THOSE OF YOU ON MARGIN DO NOT CALL OR EMAIL ME. You have injured yourself and everything you have touched. I have warned you AT LEAST 1000 times.

 

Please don’t call me if you refuse to read what is written here.

 

Nothing has changed at all. In fact, it has become fundamentally and significantly WORSE. If the stabilizers have panicked you then panic SELL everything gold you hold and get it over with.

 

If you think you are in the frying pan then buy dollars, maybe some Lehman, WaMu, Freddie and Fannie shares and jump directly into the fire.

 

If your investments are paid off in full with cash then what the dickens are you panicking over? Are you being run by the Bloomberg talking heads? Think for yourself, do not let the media do it for you. The truth is painfully obvious.

$1024 could be read. Three tries at $1000 before success could be read. A reaction could be anticipated, but not the intervention that entered the market at $960, $940 and $912. Technical analysis never saw this coming and never could have. Those that claim theirs did simply got lucky. Investigate their past predictions and reasoning behind it if you call BS on this claim.

 

Intervention has nothing to do with the markets. Only the precious few know it is about to happen. For the rest it comes out of nowhere.

Maybe your TA should be thrown out from here on in because those of you calling me today in total panic are being driven there by big money painting your damn little charts.

I cannot and will not encourage people who simply want to vent on me. Today is the end of the line for that.

 

Corporate Responsibility is first and foremost as it always has been, and even they must first read as well.

 

I HAVE A JOB TO DO AND I INTEND TO DO IT, SO EVERYONE ATTEMPTING TO STOP ME KINDLY GET OUT OF MY WAY.

 

For those of you who have taken the time to listen and protected yourselves, I applaud you.

[UpTheKhyber]

Jim Sinclair says throw your Technical Analysis out. I've never really believed in it first place.

 

http://www.jsmineset.com/

Very sensible, but by giving lessons on TA, he only has himself to blame for any backlash really....

Jim's Review Of Basic Technical Analysis

[romans holiday]

I'm sure that in long-term bull markets, there are lots of times when people are shaken out by prices falling just when people think they shouldn't fall any more right when they should be hanging on.

 

I'm also pretty sure that in a bear market (or when a bull market is over), there are lots of times when people keep hanging on all the way down and simply get wiped out because they refuse to let go.

 

 

Such a helpful guy. I thought Faber was fumbling on the CWR podcast the other week. He kept talking in the past tense... and seemed a bit clueless about the near future.

 

Edit: but on reading the following quote of his latest view, have to say he is getting it right by my book. He sees a deflationary period ahead followed by a period when inflationary pressures start to kick in.

[Steve Netwriter]

Jim Sinclair says throw your Technical Analysis out. I've never really believed in it first place.

 

http://www.jsmineset.com/

 

Jim's obviously been getting some moaning minnies recently calling recently.

 

As he says, if you lost while on margin....he warned often enough.

 

I think his suggestion to sell gold and buy Lehman is...............interesting

 

 

[Steve Netwriter]

This is such drivel, and such a good example of how nonsense gets endlessly repeated.

 

If a finely tailored suit costs $800 bucks today, then early in the year an ounce of gold bought about 1.25 suits, now it buys one. In the late nineties it bought about 0.6-0.75 suits. In 1980 it probably bought about five suits.

 

Yes, gold won't depreciate like fiat currency. But why perpetuate this inaccurate myth that its value is eternally stable? It's not like we don't have damn good evidence to the opposite, even looking at the last few months.

 

And of course fiat currencies don't go up and down short-term either

 

[romans holiday]

I hope FFS that it makes up its mind soon so I can work out where best to put my investments. At the moment just about every investment is like a car on knackered shock absorbers, go over a bump and everyone ends up feeling travel sick

 

This period of a deflationary scare involves investors getting out of assets and into cash. Think of all that cash on the side lines being held by nervous investors.

 

Where do you think they are going to go when the inflationary scare [dollar deflation/devaluation] hits?

[Steve Netwriter]

I'm not sure this analogy helps really. This makes it look as though people are a bit stupid because they're ignoring an obvious 'shining beacon of light and safety'. But if gold is such a thing, it's hiding its light under a bushel somewhat lately, so perhaps people can be forgiven for not noticing it.

 

Actually I think it's spot on.

But it's not because people are stupid. It's because they have been indoctrinated into false belief in paper.

 

It's very similar to the way the whole media has done nothing but talk up house prices.

In the same way reality will eventually dawn in the mainstream.

 

 

[romans holiday]

IT WILL...

 

the US financial sector appears to be haemorraghing again with Lehman Bros now reportedly close to being acquired, while the latest industry figures reveal that 119 US banks are now insolvent. We believe a US rate rise is highly unlikely with the possibility of a further meltdown for the investment banks and a systemic risk to the entire US banking sector. In addition, Freddie Mac and Fannie Mae, after losing a total of $US14b over the last 9 months, are both being bailed out by the Treasury which might cost taxpayers up to $US200b.We now hear that the US auto industry is asking for a further $US50b in Govt assistance to stay competitive. Have I missed something or has the US suddenly become the ultimate welfare state where the Govt waves a wand and simply prints more money? This is bad news for the already surging budget deficit, bad news for money supply growth, very bad news for the US bond market and even worse for the US economy.

 

I think the US Govt will nationalize the car industry.... to balance out their portfolio.

[mattyboy]

And of course fiat currencies don't go up and down short-term either

 

exactly - I mean the AUD has lost nearly 20% against USD over more or less the same time frame that gold has (gold is still above AUD900) - but you don't hear people to get out of AUD, end is nigh, all over etc etc.

[ChrisP]

What's going on? The vol is almost flat today. Have all the gold traders taken the day off today?

[malvern hills]

Where do you think they are going to go when the inflationary scare [dollar deflation/devaluation] hits?

 

 

What are the reasons given by Faber for the inflation-or link to what he said?

[plan9]

What's going on? The vol is almost flat today. Have all the gold traders taken the day off today?

All is quite before the NYMEX smackdown?

[romans holiday]

What are the reasons given by Faber for the inflation-or link to what he said?

 

Not sure about the link. Quark previously posted this from Faber's latest article:

 

We shouldn’t dismiss entirely the possibility that all the bailouts fail to revive credit growth and that a deflationary secondary depression is now under way," writes Dr.Marc Faber in the latest edition of his highly respected Gloom, Boom & Doom Report.

 

"The sharp deceleration in credit growth, with rising default rates across the board, could suggest that debt liquidation is now occurring...[but] Ben [bernanke of the US Fed] and Hank [Paulson of the Treasury] may replace private debt with government debt in order to bail out the system.

 

"That such a bailout will diminish the purchasing power of the Dollar even more (it should be highly inflationary) is clear...

 

"Under this scenario, renewed US Dollar weakness and strength in commodities – in particular, in Gold – should reappear."w

 

 

Personally, I agree with Faber's view here. The market is in the midst of a deflation scare [prime cause being the credit crisis]. It is only a matter of time before investors realise the dollar is also devaluing... for all the inflationary reasons we know so well.

 

Edit to add: Over and above money supply issues, now that F&F are on the Treasury's books, it certainly makes the dollar a less attractive investment for the players abroad. Could F&F be the trojan horse?

[drminky]

Todays market wrapup by Gary Dorsch on FSN is interesting. Seems to suggest its the Saudis and the Kuwaitis pumping petrodollars and oil into the US to bring down oil prices, in order to influence the US election and get their preferred (hawkish) republican candidate into the whitehouse.

 

If that's the case, we can expect gold/oil/commodities to remain under pressure until the election, then watch for the possible HUGE reversal, as this gets unwound.. It would certainly explain the La-La-goldilocks-topsy-turvy market in the US right now, that seems to have thrown all TA out the window. I mean the OVERSOLD readings on the HUI right now FFS!.. and no bounce to speak of!! Wasn't nothing supposed to go up or down in a straight line?

[Magpie]

And of course fiat currencies don't go up and down short-term either

 

Everything fluctuates short term and long term, and fiat mostly fluctuates downard. I mentioned that in my post. The bullshit in the quote is the idea that gold is magically stable within this when it is in fact rather volatile.

 

Anyway, you can't have it both ways. Either gold is on a rocket going to the moon, or it's super-stable. Which do you want? I would have thought you'd be happier with the idea that an ounce of gold will end up buying you five finely tailored suits again, and that 100 oz will buy the average house, than with the spurious claim that it will always buy you the same amounts of those goods.

[romans holiday]

The quandary I face at the moment is that I was not planning to buy any more gold; got a large proportion of my worth in gold already and was hoping to top up some cash reserves [sorry Steve ].

 

But at these prices, it is hard to resist the allure of the shiny stuff.

 

Edit: A dip to $700 [not saying it will] would force my hand.

[drminky]

Todays market wrapup by Gary Dorsch on FSN is interesting. Seems to suggest its the Saudis and the Kuwaitis pumping petrodollars and oil into the US to bring down oil prices, in order to influence the US election and get their preferred (hawkish) republican candidate into the whitehouse.

 

If that's the case, we can expect gold/oil/commodities to remain under pressure until the election, then watch for the possible HUGE reversal, as this gets unwound.. It would certainly explain the La-La-goldilocks-topsy-turvy market in the US right now, that seems to have thrown all TA out the window. I mean the OVERSOLD readings on the HUI right now FFS!.. and no bounce to speak of!! Wasn't nothing supposed to go up or down in a straight line?

 

And just like clockwork, bring down oil prices and the voters will come.. The most rigged game in town..

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

 

 

 

[headmelter]

But at these prices, it is hard to resist the allure of the shiny stuff.

 

Edit: A dip to $700 [not saying it will] would force my hand.

 

 

Have to agree rh, at $700 I think I would burn the ISA's I have.

[malvern hills]

Not sure about the link. Quark previously posted this from Faber's latest article:

 

We shouldn’t dismiss entirely the possibility that all the bailouts fail to revive credit growth and that a deflationary secondary depression is now under way," writes Dr.Marc Faber in the latest edition of his highly respected Gloom, Boom & Doom Report.

 

"The sharp deceleration in credit growth, with rising default rates across the board, could suggest that debt liquidation is now occurring...[but] Ben [bernanke of the US Fed] and Hank [Paulson of the Treasury] may replace private debt with government debt in order to bail out the system.

 

"That such a bailout will diminish the purchasing power of the Dollar even more (it should be highly inflationary) is clear...

 

"Under this scenario, renewed US Dollar weakness and strength in commodities – in particular, in Gold – should reappear."w

 

 

Personally, I agree with Faber's view here. The market is in the midst of a deflation scare [prime cause being the credit crisis]. It is only a matter of time before investors realise the dollar is also devaluing... for all the inflationary reasons we all know so well.

 

Edit to add: Over and above money supply issues, now that F&F are on the Treasury books, it certainly makes the dollar a less attractive investment for the players abroad. Could F&F be the trojan horse?

 

 

Roman -I am relatively new to all these issues,but it seems to me that while I can intellectually agree with the reasons Faber gives for an ensuing inflationary period it does not follow that it will come to pass-for example I believe (but I may be wrong)that none of the commentators we look to, called this deflation scare (except Shedlock) and the subsequent gold decline.

 

In particular I am coming to the following conclusion.The question I think to ask is what would make the market devalue the dollar, if all that has happened so far(B Stearns,indymac,credit ratings lowered for bond insurers ,F+F etc,etc) has not done so(although its still early days)

 

Leaving manipulation and black swans aside,which we obviously cannot anticipate and position for, I think that the only reasonable answer is that ,for the dollar to devalue the markets must judge that all other currencies or assets are relatively overvalued or lower risk.

In a global depression where do you park money such that these conditions are met?

 

I'm not sure, and these are just my thoughts.Any one with more brain power/economic savvy please tear to shreds/comment as appropriate.

[Steve Netwriter]

exactly - I mean the AUD has lost nearly 20% against USD over more or less the same time frame that gold has (gold is still above AUD900) - but you don't hear people to get out of AUD, end is nigh, all over etc etc.

 

Personally, I think long-term is rather longer than most folk think. I used to think much shorter-term, but now by long-term I mean say over 70 years.

So to me these little fluctuations are irrelevant when talking about long-term trends.

This is especially true during this recent fiat experiment, which is just a short-term experiment.

 

Funnily enough I was someone saying "get out of GBP, NZ$ and AUD"

But that's because I could see they had reached the end of their bull phase.

 

Unlike gold & silver, which have only just got started :D

 

Likewise I've been suggesting Yen because I could see it was reaching the bottom of its bear phase

 

[romans holiday]

From Reminiscences:

 

Without faith in his own judgement no man can go very far in this game. That is about all I have learnt- to study general conditions, to take a position and stick to it. I can wait without a twinge of impatience. I can see a setback without being shaken, knowing that it is only temporary....... I have been short... and have seen a big rally coming... making a difference of one million dollars in my paper profits. And I have nevertheless stood pat and seen half my paper profit wiped out, without once considering the advisability..... of covering. I knew that if I did I might lose my position and with it the certainty of a big killing. It is the big swing that makes the big money for you.

[romans holiday]

In particular I am coming to the following conclusion.The question I think to ask is what would make the market devalue the dollar, if all that has happened so far(B Stearns,indymac,credit ratings lowered for bond insurers ,F+F etc,etc) has not done so(although its still early days)

 

Leaving manipulation and black swans aside,which we obviously cannot anticipate and position for, I think that the only reasonable answer is that ,for the dollar to devalue the markets must judge that all other currencies or assets are relatively overvalued or lower risk.

In a global depression where do you park money such that these conditions are met?

 

I'm not sure, and these are just my thoughts.Any one with more brain power/economic savvy please tear to shreds/comment as appropriate.

 

1] The housing and banking crises are deflationary. Due to a credit boom, asset prices were over-inflated. They are now deflating due to a credit crisis.

 

2] Inflation comes from the "other end". It is primarily a problem with the currency. As many posters here have pointed out the money supply is increasing. An increasing amount of dollars circulating, competing for the same amount of goods/commodities, leads to higher prices. Another way of looking at this is that the dollar is deflating [in terms of purchasing power]. I imagine the dollar will further deflate when creditor countries downgrade the credit worthiness of the states [thinking F&F]

 

3] The dollar will most probably return to its long term trend of decline against other currencies [unless these also decline at the same rate which would then lead to a "race to the bottom" albeit at a snails pace]

 

4] The dollar will devalue against other assets such as currencies/gold etc when the market realises it is over-valued [i guess this is where inflation pyschology takes hold].

 

Edit to add: A time line needs to be kept in mind in order to see these phases play themselves out.

[skinny]

TOO MANY "LOWS"?

Here's another mathematical argument...

Here's the "once-trod path" chart for the Gold Bug's index (HUI) ... update : daily

 

 

That's a weekly chart (above).

 

Yesterday's action was:

HUI: 260.25 Change: -26.29

Open: 286.54 High: 286.54 Low: 259.52

Percent Change:

-9.17%

That huge fall brings it neatly into the once-trod-path

 

The prior high, before the OTP up was: Dec.2, 2003: 258.60

and almost touched again on Jan.6, 2004: High O.D.: 258.02

 

HUI's ALL TIME HIGH:

Monday, March 17, 2008

Closing Price: 505.76

Open: 514.89 High: 519.68 Low: 496.25

 

50% of that is: 259.84

 

HUI-260-ish looks like a great target for this move down

 

Bubb - this could be construed as negative, but it's really not, just seeking to clarify your method.......

 

Why did the Weekly [as opposed to Daily] OTPs in Gold, HUI not alert you sooner [like on the way up]

Is it because you are reviewing your methods & looking for subtlties you may have missed / new angles etc ?

 

Find the whole subject very interesting, as by definition any PARABOLA [thinking lots of individual commodities & the likes of the HK/Chinese Indicies] is going to be built on OTPs & likely some GAPS

 

 

 

[frizzers]

May the Force be with us:

 

[frizzers]

The Dark Side of the Force: