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Friday, October 8, 2010

Gold World News Flash

Gold World News Flash

Both Gold and Crude Reverse Sharply as Risk Appetite Stalls, ECB Disappoints

Posted: 07 Oct 2010 07:56 PM PDT

courtesy of DailyFX.com October 07, 2010 03:30 PM Despite a reported tumble in fuel consumption in the US and an improvement in growth forecasts from the IMF, both crude and gold would extend their impressive rallies to new relative highs. Where do fundamentals end and speculative begin? North American Commodity Update Commodities - Energy A Lack of Volume Finally Catches up to Oil’s Rally, Commodity Suffers Biggest Drop in 5 Week Crude Oil (LS Nymex) - $81.40 // -$1.83 // -2.20% Over the past two weeks, crude has climbed through tepid risk appetite trends, questionable fundamentals and (more importantly) fading speculative inflows. Having rallied over 10 percent in just the past six days, the market finally found itself overextended and running short of fresh capital. And, as the bid dried up, those traders that were late adopters on the upswing would move in quickly to cover and in turn spark a sharp reversal in oil itself. Just a day after confirming a br...


Crude Oil Hit by Profit Taking After Huge Run, Gold Sinks Most since July

Posted: 07 Oct 2010 07:56 PM PDT

courtesy of DailyFX.com October 07, 2010 10:51 PM A day of profit taking across the entire financial market sent risk assets, including crude oil and gold, sinking. Is this the start of a reversal or just a correction? Friday’s data may provide clues. Commodities – Energy Crude Oil Hit by Profit Taking After Huge Run Crude Oil (WTI) - $81.63 // $0.04 // 0.05% Commentary: Crude oil finally got hit with a good bit of profit taking, as the commodity fell $1.56, or 1.87%, on Thursday. U.S. equity markets also declined, but only by 0.16%, though they were down over 0.5% at the session low. On the economic front, the only item of note was the weekly initial jobless claims number which fell to 445K in the latest week from 455K. Jobless claims have been trending lower recently, but markets will now turn to Friday’s nonfarm payrolls data for a more definitive look at the health of the U.S. labor market. Employment is expected to fall by 5K, as census workers continu...


Update 7:45PM EST

Posted: 07 Oct 2010 07:56 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 07, 2010 03:42 PM U.S. Stock Market – While tomorrow’s jobs (or lack there of) report is a potential market mover, I continue to believe barring a significant negative surprise, the market is going to continually grope towards the top of the trading range I’ve spoken about for months. Gold and Silver – Both had a technically bearish “outside day” and if there’s significant follow through selling tomorrow, the market could end up perceiving some fair to moderate daily and weekly technical sell signals have been given. Again, I’m not looking for any significant top and will for the umpteen time note most of the surprises in this “mother” of all gold bull markets has been to the upside. I would welcome* a 3%-5% consolidation. It would give the perma-bears yet another time to clean...


Daily Dispatch: Politicians Lie

Posted: 07 Oct 2010 07:56 PM PDT

October 07, 2010 | www.CaseyResearch.com Politicians Lie Dear Reader, This is one of “those” days, where a combination of a backlog of work, the residue of jet lag from my recent trip to California, a miserable cold, and a wet New England day combine to drain the creative juices. As such, I expect to be brief and to lean on the efforts of others to bring you something worthwhile to reflect on. Starting with a very worthwhile interview of my dear friend and business partner Doug Casey, conducted by Jim Puplava during our just-concluded Gold & Resource Summit. Here’s their brief write-up on the interview and a link to it. A Doug Casey Interview During the summit, the Financial Sense Newshour’s Jim Puplava sat down with Doug Casey during Casey’s Gold & Resource Summit held this past weekend in Carlsbad, California, to discuss (among other things) his thoughts on the coming "Greater Depre...


Another Catalyst for Gold/Silver Stocks?

Posted: 07 Oct 2010 07:56 PM PDT

If you’ve followed our work you know how useful intermarket analysis can be when deciphering future movements and trends in the precious metals complex. Years ago when I would analyze Gold I would only follow Gold. Now I am aware of a wealth of markets that can be analyzed, which can help provide an outlook for precious metals. Today I am looking at the Canadian Dollar. Most Gold and Silver companies are Canadian companies. They earn and spend in Canadian Dollars. Thus, the US Dollar Gold price has much less of an impact then you’d think. It is the Canadian Gold price that matters. Below is a chart of the Canadian Gold price. This setup looks potentially explosive. We see that the market has already broken above an 18-month rising channel or wedge. Normally a rising wedge is bearish but when it occurs when a market isn’t that extended (like we see here) it can have an extremely bullish outcome. Two things we should note. First, note how each correc...


Currency Wars: The Phantom Menace

Posted: 07 Oct 2010 07:56 PM PDT

The last thing the global economy needs right now is anything that would hamper or derail economic growth. Unfortunately, there appears a growing specter of this occurring. Brazil and Japan's recent decisions to intervene in the currency markets follow a disturbing trend. If policy makers are not careful, present dynamics may precipitate a worldwide economic slowdown, brought about by protectionist pressures and exacerbated by political motivations globally. Competitive currency devaluation appears to be the name of the game for many Treasury departments and central banks alike. It may also be a key driver of the recent strength in gold; in such an environment, an asset that retains its intrinsic value is increasingly sought after. Vietnam instigated a devaluation of the dong earlier this year, Switzerland, a country renowned for stability and neutrality, attempted to devalue the Swiss franc relative to the euro, rhetoric out of Washington has intensified surrounding Chin...


Hourly Action In Gold From Trader Dan

Posted: 07 Oct 2010 07:56 PM PDT

View the original post at jsmineset.com... October 07, 2010 10:10 AM Dear CIGAs, It's amazing what a bit of a blip higher in the Dollar can do to these markets! Overnight gold soared into a new record high above $1365 with silver following suit putting in a fresh 30 year high at $23.53 as the Dollar continued sinking further in the Asian and early European trading. Enter New York and it was not long before the Euro, the Swissie and the Pound began giving up their gains and out came the selling in the metals pits. The mining shares were ignominiously dumped breaking down below 520, the previous all-important chart resistance level, as they sank all the way down to 510 before finally recovering their composure somewhat. You might recall that the 510 level was a barrier that the HUI had to overcome on its way up so this region on down towards 500 should hold if the bull market in the shares is to remain vibrantly intact. I am not exactly sure what the catalyst for all these gyrations...


In The News Today

Posted: 07 Oct 2010 07:56 PM PDT

View the original post at jsmineset.com... October 07, 2010 10:23 AM There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved. – Ludwig von Mises Dear Friends, There are a lot of new and weak hands in gold. THAT MEANS VIOLENCE. We had a high today of $1366 which in my world is a bulls eye for Angel $1369. That means the Angels are functioning like a good Swiss watch. Don’t get a knot in your tights. The violence coming in gold has no peer. From high to low you will see multi hundred dollar jumps in both directions before it reaches its fulcrum point. Gold is going to and through $1650. That should be your mantra for financial survival now. Respectfully, Jim   Jim Sinclair’s Commentary I...


Gold Hits Channel Resistance

Posted: 07 Oct 2010 07:56 PM PDT

courtesy of DailyFX.com October 07, 2010 07:05 AM Daily Bars Prepared by Jamie Saettele Daily RSI has tested the November 2009 extreme and gold has also traded above its multi month channel line today. An objective going forward remains 1405, which is the 100% extension of the 1048-1270 advance. A setback could find support at 1322. Only sustained weakness below there would indicate a trend change....


World on Edge

Posted: 07 Oct 2010 07:56 PM PDT

The 5 min. Forecast October 07, 2010 12:32 PM by Addison Wiggin [LIST] [*] Is it 1980 again? World tensions push commodities higher [*] More tankers torched in Pakistan, and a “ticking clock” on Iran... What to do now [*] Making sense of a “maximum degree of uncertainty” in currencies [*] From your pocket to the investment banks... Uncle Sam racks up the fees [*] Readers dissed by other readers yesterday fire back today... Grab the popcorn! [/LIST] Gold opened to another record of $1,360 this morning, then retraced a bit to $1,330. Oil burst through $84 a barrel. And in overnight trading, copper pierced $3.75, reaching ever closer to the 2008 high of $4.08. True, as we said on Tuesday, much of this is a story of a falling dollar. But there’s a certain fear factor at work, too — as geopolitical tensions slowly build. Investors flee to real wealth when the world gets tense. It was no coincidenc...


Gold and silver -- This time it IS different

Posted: 07 Oct 2010 07:56 PM PDT

With gold and silver bulls, since the beginning of this new PM bull in 2001, the four dreaded words that every gold/silver bull has been reluctant to say because it has served as the kiss of death every time gold/silver has been on the verge of a seemingly enormous breakout, is “This time is different.” Yet this time IS different and here’s why. At the rate of currency devaluation being inflicted upon the world’s major currencies today by Central Bankers there are, and there will be, no real gains in any of the world’s leading stock markets. As every gold bull reader is aware of, if you price the world’s leading stock markets in gold, all Western government/banker engineered rises in stock markets are exposed for what they are – illusory gains, not real gains. Real gains for the last two months in most Western stock markets when priced in gold are firmly negative. The rigged rises in Western stock markets have been nothing more...


Grandich Client Update – Evolving Gold

Posted: 07 Oct 2010 07:56 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 07, 2010 09:38 AM Well my post earlier today shows I was not privy to anything since soon afterwards, EVG announced drill results. They’re actually okay but because of pass actions, EVG’s bar has been set much higher than it may have otherwise. Because of this, there appears to be a sense of disappointment that may be undeserving, but never-the-less is present in some minds. [url]http://www.grandich.com/[/url] grandich.com...


"Gold Fever" Is Here Time to Sell Gold Stocks?

Posted: 07 Oct 2010 07:56 PM PDT

By Dr. Steve Sjuggerud Thursday, October 7, 2010 "We're about to get the first sell signal of the year for gold stocks," my friend Jeff Clark told his Short Report subscribers yesterday. And when Jeff talks, I listen. He is the best short-term trader I know. Jeff says gold stocks are seriously "overbought" by his studies. And he's looking for a 10% or so fall in the major gold mining stocks, starting about now. The duration of the trade could be anywhere from two to six weeks. It's not just Jeff. Other "smart money" traders are worried about gold today, too. In Monday's Gartman Letter, Dennis Gartman was perfectly clear: "We will caution against any and all buying gold at these levels." (Dennis knows commodity trading. He's written The Gartman Letter, daily, for 23 years. It's the one letter I read every day.) Does this mean it's time to sell? Is it time to get out of your gold stocks? Actually, no… That's the short answer from me. The longer answer is...


STRAP YOURSELVES IN - this is going to be HUGE...

Posted: 07 Oct 2010 07:56 PM PDT

We are on the point of a major breakout by Precious Metals stocks that is expected to lead to a powerful rally. The reason that the rally will be powerful is that stocks have been held in restraint since late last year by a zone of very strong resistance in the vicinity of the 2008 highs. This resistance is on the point of being overcome and when it is the last argument that bears are using to justify their position will crumble - namely that of the non-confirmation of gold's continuing new highs by stocks - and they will be forced to cover or face annihilation. This covering should give added fuel to the accelerating rally. The concern that gold and silver are heavily overbought is of course understandable. However, some of the biggest rallies in markets have commenced with the market breaking out in an overbought state and then running an overbought condition for a long time as it continued higher, with all those who missed the boat waiting for a sizeable reaction that ...


Good Grief... Another Round of Stimulus!.. A Tale of Two Contacts

Posted: 07 Oct 2010 07:56 PM PDT

Good Grief... Another Round of Stimulus! Thursday, October 07, 2010 – by Staff Report QE2. What's The Point? ... Given the likely consequences of another round of quantitative easing it's hard to see why so many investors seem so pleased at the prospect. In August Ben Bernanke acknowledged with trademark central banker understatement that economic activity was "somewhat less vigorous" than policymakers had been expecting. Indeed it was! But there was more. With bold directness he went on to say that the Fed was prepared to provide additional monetary intervention through unconventional measures, if it proves necessary.' And the crowd went wild. Sensing 'QE2′ (very witty) around the corner, stock markets rose and the dollar plummeted. The euro is up over ten cents against the greenback since then. – Wall Street Journal.com Dominant Social Theme: The Federal Reserve will do what needs to be done. Free-Market Analysis: In our attempts to...


Gold's Big Countdown Vs. the Big Four Currencies

Posted: 07 Oct 2010 07:56 PM PDT

by Adrian Ash BullionVault Monday, 4 October 2010 Over the last four quarters, the stand-out losers against gold have been the world's top four reserve currencies... The UPSHOT from last week's London Bullion Market Association conference in Berlin, at least for gold prices, was that there's more sound and fury about bullion in the financial pages than in the dealing rooms right now. Several dealers I spoke to said business was quiet, if not boring. Gold's current rally, said one speaker, "punches above its weight in terms of significance." Another noted that at the start of September, when Dollar-gold surpassed its June high, volatility was at a 5-year low. (It still is. Silver price volatility has fallen to a 3-year low as it broke three-decade highs.) You can see this lack of frenzy in prices alone, in fact – but only if you don't focus on the Dollar alone... BullionVault 's Global Gold Index shows the price of gold against the world's top 10 currencies, weigh...


LBMA 2010: Back to the Future, Part II

Posted: 07 Oct 2010 07:56 PM PDT

by Adrian Ash BullionVault Friday, 1 October 2010 "Forget mining and central banks. Here's the single most important gold supply issue today..." IT WAS TOUGH once again to meet any gold "bears" at the London Bullion Market Association's annual conference this year. The bullish arguments you know already no doubt. Low-to-zero Western interest rates...plus a growing clamor to buy gold amongst Chinese households (the Middle Kingdom's demographics are more bullish still, as Mitsubishi's Matthew Turner showed)...make a compelling case for rising gold investment demand, even without the risk of government-bond defaults, rising inflation or continued losses on "mainstream" financial assets. The Berlin conference had plenty more to say on those stories too, as we'll see below (and as you can see on the slides now freely published on the LBMA's website). But first, what of supply? Well, all the gold ever produced in history came from a mine, as Paul Burton of GFMS World Analyst r...


LGMR: Gold & Silver "Defying Gravity" But US Investment Flows Still "Chickenfeed"

Posted: 07 Oct 2010 07:56 PM PDT

London Gold Market Report from Adrian Ash BullionVault 08:15 ET, Thurs 7 Oct. Gold & Silver "Defying Gravity" But US Investment Flows Still "Chickenfeed" Compared to Bonds & Emerging Markets THE PRICE OF GOLD hit yet another new Dollar high early Thursday, touching $1364 an ounce as the US currency slumped to fresh 15-year lows against the Japanese Yen and world stock markets also fell. The Euro and British Pound both neared 8-month highs vs. the Dollar after their central banks failed to cut rates or expand their "asset purchase" quantitative easing at today's monthly meetings.Crude oil ticked higher to $83.65 per barrel, and silver bullion broke yet more three-decade highs at $23.50 per ounce. "Getting to a much higher price for gold is not quite the leap of imagination that it seems, adjusting for inflation," says Harvard economist Kenneth Rogoff."Gravity defying!" gasps a Hong Kong dealer in a note. "All 4 [precious] metals were heading north and sellers disa...


Grandich Client Update – Silver Quest Resources

Posted: 07 Oct 2010 07:56 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 07, 2010 06:44 AM Lack of drill results and profit-taking after a big run-up (I noted in my Sept 15th update I and others could do so)are the likely culprits for the sharp correction that has occurred. I still control 2.5 million shares and am strongly contemplating adding if the shares fall below .60 without any further drill results. I think this video goes a long way in why SQI remains quite interesting. The Yukon play may be seasonal but I suspect the 2011 season will start to come into play by early 2011 even though drilling won’t start again until mid-spring. There are numerous drill holes still to come out from the Yukon and B.C., plus I do believe a tremendous grass roots play called the Slate is to be drilled or drilling has already begun. I suspect we shall see a significant jump up in the reserves on the Capoose an...


Grandich Client Update -Evolving Gold, No News is Not Necessarily Good News

Posted: 07 Oct 2010 07:56 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 07, 2010 06:20 AM Knowing the following comment could cause my working relationship to come to an end (I took a similar position at the beginning of the year), EVG has so far missed most of the entire move up in gold and the junior resource market in 2010. Despite what a few cyberspace fans of mine (who don’t seem to have much of a life outside of their computer keyboards) would claim otherwise, any working relationship doesn’t get in the way of my thought process despite the potential conflicts of interest). The lack of any drill results combined with the company’s past communications slip-ups, has given shareholders and interested parties little to hold onto. This has been compounded by the fact that the vast majority of other juniors have risen nicely during the same period. I don’t have a stitch of any new i...


We Have a New Gold Standard: Marc Faber

Posted: 07 Oct 2010 07:56 PM PDT

I wouldn't read a thing into yesterdays price action in gold. It spent the entire day range-bound between $1,120 and $1,130. The highs and lows aren't worth mentioning. Nothing to see here, folks! It was the same for silver. There's nothing to talk about in this chart. The dollar has been an interesting case study over the last couple of days. A rally started about 2:00 a.m. Eastern time on Wednesday morning... and, in fits and starts, added about 80 basis points to its price over the next 36 hours... yet the precious metals prices barely reacted at all. In times past, a dollar rally of this magnitude would have resulted in a rather significant sell-off in both gold and silver. It certainly didn't happen this time... and as I mentioned in my column yesterday... we've see a lot more of that kind of action recently, where the gold price is not necessarily tied to the dollar action. As other commentators have pointed out... the precious metals are now bac...


Floodgate Thrown Open

Posted: 07 Oct 2010 07:56 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 07, 2010 03:35 AM This comment by yet a Fed official is another log on the fire to a telegraphed Fed move (to be fully blessed at the next fed meeting) that has the printing presses running at record speeds. This is very bullish for precious metals (although as previously noted we’re getting more overbought each day and I’m prepared to take some profits in gold and silver), a short-term tonic for U.S. equities, and bad news for the terminally ill U.S. Dollar [url]http://www.grandich.com/[/url] grandich.com...


Grandich Articles

Posted: 07 Oct 2010 07:56 PM PDT

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 07, 2010 04:09 AM Read Peter Grandich's article in the Bayshore Monitor "Gold keeps gaining" – October 2010 Read Peter Grandich's article in the Country Monitor "The rise of the Tea Party" – October 2010 [url]http://www.grandich.com/[/url] grandich.com...


Silver Surges, But Still Playing Catch Up With Gold

Posted: 07 Oct 2010 06:42 PM PDT

Mark O'Byrne submits:

Gold

Precious metals have risen to new highs on deepening concerns about the US economy and the growing risk of currency devaluations internationally. Gold reached new nominal record highs at $1,364.77/oz and silver reached new 30 year record nominal highs at $23.52/oz.


Complete Story »


This Secret Factor Will Cause Gold to Go Parabolic – and We Are Not There – YET!

Posted: 07 Oct 2010 06:16 PM PDT

One of gold's allures is its use as a hedge against negative economic outcomes: inflation, deflation, general economic collapse and even war [with] investors and speculators enter[ing] the market based on their guesstimate of how bad things might get. [An analysis of] how gold performs during inflation and deflation [suggests, however, that there has to be some another] market force - some secret force - that has driven gold prices by +370% over the last 10 years. Words: 734


Plunge in Gold, Silver Just a Healthy Correction

Posted: 07 Oct 2010 06:01 PM PDT

Bullion bears had better not get their hopes too high in the wake of yesterday's nasty plunge in precious metals. The price of an ounce of gold on Comex fell $40 from high to low, or about 3%, and silver fared even worse, falling from 23.53 to 22.47, or nearly 4.5%. We see this action as purely corrective, however, since none of the factors that have been driving silver and gold higher have changed.


Chasing Tail-Risk with Gold - Ding Dong!

Posted: 07 Oct 2010 05:35 PM PDT

CMIGS closed Monday, October 11, 2010 Columbus Day

Posted: 07 Oct 2010 05:13 PM PDT

In celebration of Columbus Day, CMI Gold & Silver Inc. will be closed Monday, October 11, 2010.

We will reopen Tuesday, October 12, 2010 for our normal hours, 7:00 a.m. to 5:00 p.m. MST.

Please note that the the COMEX and the Globex will operate their regularly scheduled hours, which means that there will be a market for precious metals.  However, the Post Office and the Fed will be closed.  Because the Fed will be closed, many banks will be closed.

Consumer Deleveraging to Topple the Commercial Real Estate Market

Posted: 07 Oct 2010 05:00 PM PDT

The US is in a state of consumer deleveraging — given unsustainable levels of personal debt and a weak job market – and as a result retailers are likely to continue facing hard times. The highly leveraged ones in particular are poised to watch their fortunes disintegrate. As a guest contributor to Naked Capitalism, Jim Quinn of The Burning Platform offers new insight on how the collapse will unfold in the commercial real estate (CRE) market.

According to Quinn:

"To give some perspective on our consumer society, here are a few facts:

* There are 105,000 shopping centers in the U.S. In comparison, all of Europe has only 5,700 shopping centers.

* There are 1.2 million retail establishments in the U.S. per the Census Bureau.

* There is 14.2 BILLION square feet of retail space in the U.S. This is 46 square feet per person in the U.S., compared to 2 square feet per capita in India, 1.5 square feet per capita in Mexico, 23 square feet per capita in the United Kingdom, 13 square feet per capita in Canada, and 6.5 square feet per capita in Australia…

"…Let's look at some facts about the commercial real estate market and then assess the future:

* The value of all commercial real estate in the U.S. was approximately $6 trillion in 2007 (book value, not market value).

* There is approximately $3.5 trillion of debt financing these commercial properties.

* Approximately $1.4 trillion of this debt comes due between now and 2014.

* The delinquency rate for all commercial backed securities exceeded 9% for the 1st time in history last month and has more than doubled in the last 12 months.

* Non-performing loans are close to 16%, up from below 1% in 2007.

"Do these facts lead you to believe that the commercial real estate sector has bottomed, as stated in the Wall Street Journal? The Federal Reserve realized the danger of a commercial real estate collapse to the banking system over a year ago. They have encouraged banks to extend and pretend."

Quinn goes on to describe his concerns about the "shadow monetization" of CRE debt. He points out that banks are forgoing overdue debt repayments because they see no point in either chasing after money they know isn't being generated by ghost shopping malls or foreclosing because it isn't a viable option.  Even if banks repossess CRE, they would be unable to find any buyers for the inventory in the current market. So, rather than admit the failure, banks are sweeping the mess under the rug, following the "extend and pretend" model described above, and hoping for an unlikely CRE market rebound.

You can read more details in the Jim Quinn piece on how consumer deleveraging equals commercial real estate collapse, appearing at Naked Capitalism.

Best,

Rocky Vega,
The Daily Reckoning

Consumer Deleveraging to Topple the Commercial Real Estate Market originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."


“Gold Fever” Is Here… Time to Sell Gold Stocks?

Posted: 07 Oct 2010 04:34 PM PDT

By Dr. Steve Sjuggerud
Thursday, October 7, 2010

http://www.dailywealth.com/

"We're about to get the first sell signal of the year for gold stocks," my friend Jeff Clark told his Short Report subscribers yesterday.


And when Jeff talks, I listen. He is the best short-term trader I know.


Jeff says gold stocks are seriously "overbought" by his studies. And he's looking for a 10% or so fall in the major gold mining stocks, starting about now. The duration of the trade could be anywhere from two to six weeks.


It's not just Jeff. Other "smart money" traders are worried about gold today, too. In Monday's Gartman Letter, Dennis Gartman was perfectly clear: "We will caution against any and all buying gold at these levels." (Dennis knows commodity trading. He's written The Gartman Letter, daily, for 23 years. It's the one letter I read every day.)


Does this mean it's time to sell? Is it time to get out of your gold stocks?


Actually, no…


That's the short answer from me. The longer answer is, it depends on your situation…


In my True Wealth newsletter, where we're long-term investors, we're keeping our position in GDX, the big gold miners fund. Instead of trying to time the zigs and zags, we're staying in. Chris Weber, a fantastic investor, is clearly long-term bullish on gold as well (as he wrote in yesterday's DailyWealth). He's also staying in.


But in the short run, if you need the money, if you're sitting on huge gains that you don't want to give back, or you're too levered, you might want to scale back. Listen to the smart traders – like Jeff Clark and Dennis Gartman. They think odds are high, respectively, for a 10% pullback in gold stocks and a $100 fall in the price of gold.


They call gold and gold stocks "overbought." I see gold as just too popular now…
Dennis Gartman touched gold's popularity anecdotally in yesterday's Gartman Letter, saying he's never had so many calls for interviews from the media – and 100% of the calls are for his opinion on gold. He said gold fever is high… but "fevers break."


It's not just Jeff and Dennis that see it… And it's not just anecdotal evidence… My friend Jason Goepfert at SentimenTrader studies sentiment. He says right now, public opinion on gold is at its highest level this year. The commodity futures contracts show the same thing… Large speculators are more "long" gold now than at any time this year.


So the time is ripe for a correction in gold… more so than we've seen so far in 2010.
But Dennis Gartman and Jeff Clark don't want you to confuse their short term positions with their long-term beliefs…


Dennis says, "We are not bearish of gold and we shall not even for a moment consider being short of gold."


And even though Jeff is making a short-term bet against gold stocks, he won't stay short. "It's difficult to short the sector as a long-term investment," he says, "because logic argues for higher gold and silver prices over time."


So long-term investors (like my True Wealth readers) should be prepared for some volatility, at the very least. No need to rush for the exits, unless you have an itchy trigger finger.


And if you're thinking about buying gold stocks, you might want to give it a couple weeks, based on the advice of better short-term traders than me – Dennis Gartman and Jeff Clark.
Good investing,

Steve

Further Reading:



If you like the idea of hopping in for gold's zigs and hopping out for the zags, check out Jeff Clark's how-to essay. The last six times readers bought gold stocks using his indicators, they made money… with safe, fast gains ranging from 15% to 110%. "If you do nothing but follow these overbought/oversold gold stock readings," Jeff writes, "you'll do far better in gold stocks than most folks ever will." Learn the system here: My Secret Gold Stock Timing System.
With gold and gold stocks at record highs, now's probably not the time to pile in. But there is one gold investment Tom Dyson likes here. Despite gold's run, this investment still trades at 2007 prices. Read more here: The Only Cheap Gold Investment Left.

10/7/10 Midnight Report: Market flat enough to be part of the itty bitty returns committee

Posted: 07 Oct 2010 04:31 PM PDT


The market closed moderately down today as investors, gamblers, and algorithms everywhere await tomorrow's jobs report which will likely be as telling as one of Eddie Long's altar boys (well for the ten or so years prior to this one) because thanks to the delightful birth/death model (where the output is more hard-coded than the Kryptos sculpture) the numbers will be more manipulated than Lexington Steele's johnson on the set of any of the Manhammer films.  Look Money McBags doesn't have a crystal ball (though if he had a Krystal Ball, he would make sure he always wore a dildo on his nose just for her*), so he has no idea if the numbers will beat or miss guesses, but he talks to a hella lot of people on the Street and in business and many of them continue to be out of work with no end in sight so Money McBags will probably ignore the number released tomorrow and stick with his actual primary research which points to job openings being more non-existent than the tooth fairy, Steve Jobs' liver, or money shots in lesbian porn.

 

Speaking of jobs, new claims for unemployment beat guesses today by coming in at 445k which was 11k below the upwardly revised 456k from last week and likely at least 5k below what it will be upwardly revised to next week as once again the "hold the shock and hope for no awe" strategy by the government (which is the worst kept government secret since Valeria Plame's cover was blown or Bill Clinton's cigar was blown) once again rears its ugly head.

 

Interestingly, some people were touting continuing claims dropping by 48k as somehow being positive since it was the lowest since June but the number of people on emergency and extended benefits increased by 257k.  So look, Money McBags is no labor expert (though he did wake up for just long enough during that shitacular Knocked Up movie to see Katherine Heigl's character give birth, so that has to count for something), and he's also no mathemetician (though he does know the difference between Ito's lemma and Judge Ito's dilemma, which of course was that he had to let OJ go free), but if the number of people getting emergency and extended benefits increases by more than continuing claims decrease, doesn't that mean that net unemployment increased?  Sure it would be great if the Underground Man were right and 2+2 did not always equal 4 and thus we could all ignore numbers as if we were long the S&P, but in this non-abstract universe we live in, the laws of math hold and thus instead of saying that continuing claims dropped by 48k to try to paint a rosy picture, what needs to be reported is that all claims increased by ~210k with the largest portion of that coming from people who still can't find work and see their skills diminishing faster than Sheyla Hershey's chest (and one can assume her social life) or Lou Dobbs' credibility.

 

In other macro news, retail sales in September beat analyst guesses thanks to back to school specials like buy one get one free, 20% off, and something called "going out of business liquidation sales."  Analysts say the increased sales were driven by consumers feeling more confident thanks to a rising stock market (Way to go Ben!  Nothing like putting the cart before the donkey), better weather, and widespread cognitive dissonance.  Same store sales rose by 2.8% well above analyst guesses of 2.1% and were driven by retailers geared towards teenagers as those stores were up 6.7% as teens stocked up on Twilight paraphernalia, bottled nut sweat from that Justin Bieber kid, and plenty of lipstick for the start of rainbow party season.

 

In international news, the ECB held rates steady, whispered sweet nothings in their ear that everything will be ok, and gently caressed them as if they were Lucy Pinder. The ECB also announced they would start removing liquidity from troubled banks which means if Money McBags were European, he would start removing his liquidity from European banks as well.  Elsewhere internationally, Greek public servants went on a 24 hour strike (or as it's more commonly known in Greece: "Thursday") while Fitch downgraded Ireland from AA- to A+ and Money McBags downgraded Fitch from F- to completely irrelevant.

 

In stock news, Adobe spiked up ~11% on rumors of a MSFT take out of the company while PEP fizzled out after lowering the top end of their guidance due to currency exchange rates expected to impact top line by 1% as the US dollar loses value faster than a single female after the age of 30.  Elsewhere MAR put up a decent Q but sold off by 6% as an analyst from Raymond James was unimpressed with the company's revenue guidance for 2011 citing the effect that reduced revenue will have on leverage and the fact that he recently stayed at a Marriot and still can't get the mold and dead stripper smell off of his clothes.  And finally YHOO dropped 2% as their unsavvy investor base got their dial up internet connections to work just long enough to realize that there is a little something these days called GOOG.

 

Money McBags has more for you at the award winning When Genius Prevailed.

 

*As a brief aside, Money McBags is well aware that our society is devolving in to one where good manners, civility, and common sense are becoming more passe than full bush, and Money Mcbags is also aware that he has a very silly name for which he often derides his parents as it has caused him much trouble in life, but Mr. and Mrs. Ball, if you're reading this, (and frankly, why wouldn't you be?) why the fuck would you ever name a child of yours Krystal?  Seriously, that is so annoyingly iditiotic that it makes Money McBags' balls hurt, and not in the good way like he imagines they would hurt after overuse by the lovely Odette Yustman, but in the bad way like a jagged catheter gone awry.   Having the last name Ball and naming your daughter Krystal should be grounds for child protective services to immediately take your kids away and supply a forced vasectomy.  Most of all, it leaves Money McBags to wonder if those dickholes had a son and named him Harry,

'Dramatically Poisonous Economy" Heading to 'Catastrophic' Collapse, Says Acclaimed Economist

Posted: 07 Oct 2010 04:24 PM PDT

Acclaimed economist Manfred Max-Neef, author of the award-winning book From the Outside Looking in: Experiences in 'Barefoot Economics' recently appeared in a must-see interview on Democracy Now where he says a second, more catastrophic crisis is unavoidable because our economic model is "dramatically poisonous."  Max-Neef explains that "Greed is the dominant value today in the world and as long as that persists, we're done!"  But he doesn't just mean done economically, he means done as a species.
(snippet)
When asked what he thinks needs to change, he replied: "Oh, almost everything! We act systematically against the evidences we have."  He believes the economy will "catastrophically" self-correct and a new model must emerge with principles to humanize the economy in balance with the biosphere. His five principles and values to develop a humanized economy are as follows:
  1. The economy is to serve the people, not the people to serve the economy.
  2. Development is about people, and not about objects.
  3. Growth is not the same as development, and development does not necessarily require growth.
  4. No economy is possible in the absence of ecosystem services.
  5. The economy is a subsystem of a larger finite system -- the biosphere, hence permanent growth is impossible.
The fundmental value that is needed to sustain this new economy is, "No economic interest, under any circumstances, can be more important than LIFE in all its manifestations."

When the engineered collapse comes, we can bet that the corporate-government will offer up their "solutions."  It's not good enough for the Human World Order simply to oppose tyranny; we must also present logical solutions. 

Massive Physical Gold Buyers Just Below These Levels

Posted: 07 Oct 2010 04:23 PM PDT

After the drop in gold and silver today, King World News contacts out of London have confirmed massive physical purchase orders on gold between $1,308 and $1,317. One source who wishes to remain anonymous stated, "It will take a massive amount of physical gold to take out those levels. You can have shenanigans in the paper market, but there is an underlying physical market here in London and that is where the floor appears to be for now."


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