Getting hammered again

Welcome to the Precious Metals Bug Forums

Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more.

Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!

ancona

ancona

Praying Mantis
Messages
3,341
Reaction score
33
Points
0
Location
Waaay south
Looks like the Brotherhood of Darkness needs silver to crash. They have forced a huge drop in a very few minutes this morning. At some point, some of tjhis unbacked paper has to be honored. I wonder it "they" will ever allow that to happen?
 
And here I thought we wouldn't see gold going towards 1650 again, just means more stacking opportunities.
 
Gold too, my dumb system has had me out of all but my core for awhile now, but I recently about doubled what I'm calling core - and that new part is badly red. Some probably the dollar, but this is too big for it to just be that.
 
Risk off trading right now:
  • China released lowered growth expectations
  • Iran war concerns
  • Euro mess unresolved and looking like it will unravel
At least, that's the theory...
 
If anyone is focused on the daily COMEX price as to their views on PM's they don't understand the real issue.
Keep your eyes on the future where PM's are real money.
 
Jetstream said:
If anyone is focused on the daily COMEX price as to their views on PM's they don't understand the real issue.
Keep your eyes on the future where PM's are real money.
Click to expand...

Well.. the problem is that some of us are professional traders and we have to do some hedging from time to time. It allows us to keep our positions on (so we aren't being forced to liquidate) and feel more comfortable buying the dips. A couple weeks ago everyone was foaming at the mouth for silver+gold and sentiment was getting way too bullish. Now, sentiment is much less overzealous so in a couple weeks we should be higher but we need to shake the tree some more IMHO. It might take a week or so of going nowhere or stabilizing. Worst case, we violate some levels and everyone gets depressed again. After 2.5 months higher, getting 2-4 weeks down should be welcomed. Especially if you are trying to build positions.

Another issue that you have to understand is that buying the companies is not the same as buying gold. Eventually, they will be treated better than they have been over the past year (and 08). The fact that so many people were recklessly unprofessional (back in 08) in this space caused a huge problem for the industry. It scared capital away and most companies still haven't recovered. Miners weren't given bailouts so all the work that has been done has been hard and real. Valuations are simply meaningless at this point. All that matters is sentiment.
 
dereksatkinson said:
Well.. the problem is that some of us are professional traders and we have to do some hedging from time to time. It allows us to keep our positions on (so we aren't being forced to liquidate) and feel more comfortable buying the dips. A couple weeks ago everyone was foaming at the mouth for silver+gold and sentiment was getting way too bullish. Now, sentiment is much less overzealous so in a couple weeks we should be higher but we need to shake the tree some more IMHO. It might take a week or so of going nowhere or stabilizing. Worst case, we violate some levels and everyone gets depressed again. After 2.5 months higher, getting 2-4 weeks down should be welcomed. Especially if you are trying to build positions.

Another issue that you have to understand is that buying the companies is not the same as buying gold. Eventually, they will be treated better than they have been over the past year (and 08). The fact that so many people were recklessly unprofessional (back in 08) in this space caused a huge problem for the industry. It scared capital away and most companies still haven't recovered. Miners weren't given bailouts so all the work that has been done has been hard and real. Valuations are simply meaningless at this point. All that matters is sentiment.
Click to expand...

Fully understand. I should have been a bit clearer in my comment which was directed wholly at those who are amassing physical. The daily ups and downs should neither get them depressed nor ecstatic. They need a longer-term approach.
 
In some worlds, including mostly mine, valuation (a purely human construct) == sentiment (another purely human construct).

Standing outside the emotion and looking in rationally is the way to trade, you betcha.
 
With Euros being added, and Japan still trying to force the Yen down, the Dollar still needs to be valued against recent LTRO deposits that are still being added to the ECB, is how I'm reading this. Feel free to fire back on this. I"m interested in more dynamics than currencies, even though I feel they are the largest driver, aside of take downs, profits, shorts, and stops...
 
^ That's a rational approach. Markets aren't always rational.
 
KMS said:
With Euros being added, and Japan still trying to force the Yen down, the Dollar still needs to be valued against recent LTRO deposits that are still being added to the ECB, is how I'm reading this. Feel free to fire back on this. I"m interested in more dynamics than currencies, even though I feel they are the largest driver, aside of take downs, profits, shorts, and stops...
Click to expand...


At the same time, how much of the LTRO was done with USD? How much was really coming from the fed? There is more to this story than the cover we are seeing.

I just think we are having a correction.
 
Honestly, I thought LTRO was strictly Euro zone banks being handed Euros?

And here, Tyler is pointing out the new gap between between the Euro and the Dollar, and that dollars need to be added to equalize the currency base, (right?)

So, yeah. This is devaluation of the euro and the dollar has gone up. People are selling into dollars.

Tyler says:
Because as a reminder, the key driving relationship for relative risk performance of 2012 as we forecast back in December is the correlation of the Fed and the ECB's balance sheets, and the EURUSD, respectively, because while we may pretend that there is still alpha in this joke of a market, the truth is that in this new normal only beta matters (the more lever the better), and the only beta that matters is that generated by relative USD strength/weakness.
Click to expand...
 
KMS said:
Honestly, I thought LTRO was strictly Euro zone banks being handed Euros?
Click to expand...

That's based on information was have today. Remember those swap agreements?

The issue is that the ecb is currently allow to print unlimited dollars and lend them out. Dollars, not euros. We have no idea how much of the LTRO was done in USD and how much was done in EURO. Everyone is currently assuming 100% Euro but when you look at the USD reaction to the LTRO, it wasn't dollar positive.
 
I think this pullback is over for now. 32 held quite well and will prove to be the line in the sand against short sellers. If we close above 33 for the rest of the week, the floor may even be raised to that point. Right now, I would bet that the shorts are beginning to quietly cover some of that unbacked paper they threw in the pit over the last few sessions.
 
The swap arrangements back in November pretty much insured that they will have an unlimited amount of dollars printed by central banks into 2013. Not sure what the cut off date is "supposed to be". Though honestly, I don't think it will stop till the dollar has another substantial drop.
 
You must log in or register to reply here.
Back
Top Bottom