Gold at a Crossroad

Gold on a long term trend and trend down for the last year is at a crossroads.
Many including myself, are optimistic that the downtrend is behind us.
But we cannot know for sure until a few months of a trend change is behind us.

Below is a long term view of gold price, and how gold came down to the long term trend line up and bounced off it upwards.  It maybe a 'dead cat bounce', or a trend change.

For your info see below, I have to run and plan to do a GDX/GDJ chart later.

GDX call option activity

I had a bid in to buy 20 (2000 shares) of GDX call options for strike of 35 in 2015.
Basically, for $1k, at anytime GDX is worth more than 35.50 in jan 2015, get all profits.
Alternately sell if the option is worth more in the year ahead.


Today, I saw some insane volume with this option.  interpret as you wish.
Over $500K in options in this one level alone exchanged hands.
See below.  Good luck

This week in charts - All hands on deck

Due to various reasons, I am not very well positioned to capture the market plunge that was experienced Friday and likely this week.
I am positioned to avoid the pain that should come to those long the market, as I posted Thursday night to GET OUT OF THE MARKET!
A market plunge below S&P 500 of 1,100 is very ominous, next stop is likely on the express train down to 2009 lows of 666.  For those that read this blog regularly, you will remember on market plunge day back on August 8th, I did not panic...well, now I am. :)

I give you this week in charts, and lets just say it may not be a very Merry Christmas this year.
Good luck, and Obama, prove me wrong and give the country some juice, even if it is BS, and lets kick the can yet again, in hopes tomorrow someone fixes this mess.......which of course, there is no Santa.....

Short call outs!
DXD - 19.61  - double inverse short, should go higher! HIGH risk
FAZ - 60.62    - Triple inverse short banks, should go higher! HIGHEST risk
NFLX - 213 - should go much...much...MUCH lower. (dropped from 235 on Thursday to 213 already)
                     - lost access to many movies, the bandwidth issue will get them eventually, raised prices, and
                     - my guess is many ordinary people bought this stock, so pro's will crush them
PCLN - 528 - good company model, hard to bet against....but I still think lower
DECK - 85.90 - eh, probably lower, really a coin toss, but its an old short I can't let go.
ODP - 2.29 - Shorted on 7/1 @ 4.24, probably going to zero...Office Depot.
DGP - 71.76 - DOUBLE Gold ETF - if you like gold, you'll love this ETF, with 2x daily moves than gold.
                      - Crazy high risk!

In first chart, I reference the long term trading indicator, read more here.
I STRONGLY reading latest news this week at Mish's blog, click here.

From Mish's blog, I can't believe this guy said this publicly. Geesh:
Deutsche Bank CEO says "It's Obvious Many Banks Will Not Survive if Forced to Value Sovereign Debt at Market Prices"

To the charts!

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

This Week in Charts

I said enough on Thursday's post titled "Market thoughts month to years ahead".

One thing I realized since then is the view is too USA centric. This time around the problems will come from Europe and other western countries. This will make the events and effects much different than 2008 since America won't be leader of problems.

And as such, the shape, form, and timeframe makes me very unprepared to make any good thoughts on when this starts. Tomorrow? Really who could know with such limited information.

Anyway, for this week, not panicking Monday was good, buying Rare earths was great. Selling my GLD, the jury is still out.

To the charts!

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Panic Day - USA Downgrade

The market cover story for the panic today is a downgrade of US treasuries by Standard and Poors to AA+, a major milestone along the road the US is on. While this is a significant event, one that I have feared since 2006, it isn't unexpected.

Spending at the deficit rate the US has is hardly surprising that the US debt machine is going to be questioned. With that said, who cares the US enjoys being best of the worst, and there is nothing else big enough to turn to. This IS a step today that deserves entry into my series of "Financial Ground Zero" events. But I don't think it is time to panic.

The day the news tells you to panic, and buy gold, should be the day to NOT panic and NOT buy gold. The day to PANIC was the last 6 months or so of me hemming and hawing that this entire market rise is bullshit. Now is too late to panic.

DO NOT RUN INTO THE LIGHT! It is a trap. :)

I am not stating sell all gold holdings, but the day that gold spikes is hardly the day to buy, it is a day to sell. I am selling portions of my GLD, SLV, and other holdings TODAY. I am keeping my gold miner stocks, AVL, in hopes they recover nicely if the market does too. Matter of fact, I am buying a bit of AVL today, but that isn't for the nervous types. AVL is below 4 bucks today, much lower than it's high near 12. Update: Also covering many shorts, 50% or more.

My two cent advice is lighten up on gold TODAY, buy stocks you have loved to have had purchased before, but now are cheap, and keep a decent portion in cash for the rest of the week.

All actions today may be wrong. Buying gold, selling gold, buying or selling stocks. But the smart player does not run with the masses, it runs against it. Balance that thought with resisting going full steam in front of the train, more prudent to edge out there, get a toe hold.

This actually could be the beginning of the worst fear I have had since 2006, an assault on US economic basis and loss of faith. But I can't bring myself to believe it has started already.

With that said, the market could easily go down a bit more. Just I am not sure what "worse" news is out there after the US Treasury has been downgraded. My assumption is an avalanche of following downgrades by others are to come this week, so I can't see the market doing a stellar rally into it.

In the end, trade what you think is best, look around, my opinion is my own, and should not be seen as advice for what you should do, see the link on the right for disclaimer.

Good luck!

This Week in Charts

This week in charts!

For the most part, I have no strong opinion on market direction this week, I am leaning towards lower. My primary focus is really waiting to hear if Gary Savage states its time to load up on precious metals.

Otherwise, I am in AVL, added positions to uranium (URA), and have positions in food (RJA, DBA), oil (OIH) and some other resources. And as always, in core gold.

To the charts!

The second chart, with US 30 year bond rates breaking lower, if we go much lower, it may break the back of gold.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

US Dollar, Gold, and Market Timing

The US Dollar is heading for a break of the 2009 lows, as you can see in the chart below.

Given my view of the world and gold, my gut tells me I should be all in on gold and miners as the dollar hits the bottom and reverses.

However at this point in the market events, I only trust Gary of the Smart Money Tracker. It has taken me years to get to the point of trusting Gary's judgement, and in this pivotal historical event, I am putting myself in Gary's hands.

I strongly recommend if you are going to play precious metals to pay for Gary's service. I'll honor his service by not repeating or duplicating his charting. But I will lift one quote from Gary's service to summarize his position.

"Once the dollar bottoms then gold will Correct".

Gary has a large amount of material over the last year to support his logic, and I encourage readers to pursue reading why Gary believes above will occur.

Sufficient to say, this is a big leap of faith on my part, for I'll be sitting on my hands waiting for Gary to instruct his readers to push all in. Right or wrong, thats what I am going with.

I am still heavily in AVL, and will likely dump 50% of my position at the moment Gary tells me to go into gold. I reserve the right to change my mind between now and then.

I am also going to buy a little of URA, at about 14.80, ETF for Uranium, to read why, click here.

I do believe once the USD breaks all time lows, we will enter into a surreal market, that will be difficult to navigate. And the politicians you can bet will have a surprise announcement in an attempt to sway the markets. What I am most curious about is what will mark the USD bottom, just mere sentiment and open interest in shorting the dollar? Or will meaningful change of the US government be announced?

The worst case scenario for me is a USD outright drop, and gold spikes up hard, for I then will question Gary's logic. But I think its too early for USD demise, and thats yet another reason why I trust Gary.

And finally, I will not sell my core position in precious metals until a fundamental change occurs in world finance...such as USA proposes a balanced budget and enforces financial laws.

Good luck.

From WebSufinMurfs FinancialBlog2

All systems are go

Gold breaks to new highs, gold miners breaking out, avl looking great, all systems are go.

Every cent I can is deployed with almost no shorts to be found. SLW has been a big mover, as my favorite AVL.

Other stocks that jumped today are GSS, AUY, GDX, IAG, IVN. Others with only 2-3% gain are NAK, NXG, RGLD, IVN, HMY and ANO.

GLD, PSLV didn't do so bad either.

For now, the world looks great in resources, especially precious metals and miners.

Good luck, and although nothing has been fixed in the economy, for now, its up up up and away.

Percent gains have been very welcome the last few weeks. Hard to hang on for this upswing.

Trade idea I like is Uranium sector on Slope of Hope, they got slammed with Japan problems.

Uranium is here to stay with china building crazy number of reactors.

In particular, some decent risk play is DNN and CCJ.

And I agree AAPL stock owners should take heed and put stops in, click to read more.