Friday, June 24, 2011

A headless market is about to break its neck...

Its not pretty...and with the bankrupting of the rediculously large amount of fully margined accounts it may just get downright UGLY. It takes preparation not to find yourself in front a running freight train...I truly hope that many of you are prepared. On this blog what is happening is NOT a surprise, though apparently to a few analysts from Deutsche Bank, Citi and Goldman, who were "wheels off the wagon" bullish, they will of course be surprised. And though they are rank as amatures, have no idea what is going on and shoudl be summarily terminated, they will still get to keep their jobs. I guess helping people lose their purchasing power is a serious profession that pays highly. I am of the mind set that preparation is worth the hassle.

I hope that these patterns are wrong, but its nice to know that you are prepared, if you are, and will not suffer a huge draw down and damage to your purchasing power. The sad thing about a deflating market is that the money that the market manufactures by the simple agreement to pay higher prices completely vanishes. Poof, going, gone and gone...unless someone is short against those declines the money is completely gone. I work hard to preserve purchasing power and to attempt to keep some of that money from vanishing from the system. This is a part of me and my partners portfolio approach for the protection of assets. Douglass Lodmell ( has the some of the best asset protection structures available and we have worked together to design a rational and constructive approach to storing value and manage purchasing power fluctuations to a constructive portfolio approach for overall safety. We seek to do this in a manner that attempts to insulate from anything from collapses in the leveraged financial system infrastructure and equally from collapses and inflations in prices.

This safety thing is serious business, and I think more people should stop thinking about gains - and should rather be thinking about safety and their cash as an asset. That asset should be protected. Today, shorter term US treasuries traded at negative yield as I have been talking about. If the patterns posted in the charts below, play out - I believe that the yields will breakout for an extended run of negative yields whereby, to store your money with the US government you pay them 1%. I think that without this type of breakout the bonds would very likely enter a bear market. However, paying to store your assets, cash and otherwise, is not an new concept. If you want to custody your money at Pictet (which is linked on my blog) you have to pay them 1%.

We have been trained to think that banks pay you...but what you get in exchange for that is banks playing fast and lose at their casino...which is fine if you are Alan Greenspan, Ben BURNanke, Sandy Weil, Lloyd Blankfine, Henry Paulson, Jamie Diamon or a host of other wealth transfer and destruction specialists...but its not fine if you are a hard working and tax paying citizen.

Farage gets it...

A Blog to watch...

I want to make a special mention of what Tony Pallotta is doing on his blog First he is doing an exceptional job. I truely is amazing what happens and can happen in the blogging community where people generally work for free or very little compensation. Tony is an example. He blows away analysis by the big firms and he posts when you want to see it not a few weeks later like Goldman Tax likes to do. He does end-of-day wrap ups and economic data analysis all delivered with a generous helping of common sense and objectivity...but not without opinion. Most blogs I have seen attempt to tell you want you want to hear...something for everyone..."The market could go up...or it could go down..." as some fairly prominent analysts I know continue to trumpet so that they can keep getting paid while offering little of value. Tony does nto dot his...he says it as he sees it - and he is objective. I recommend that you all put this blog on your watch list and read it regularly. I do not read very many blogs for market analysis because I find it very noisy and distracting, but I do read Tony's regularly.

Here is the link again...

Thursday, June 23, 2011

Today's market action was deliberately designed to confuse

I will be posting charts as soon as I am able...however, the market is NOT a long here despite the deleveraging going on...what I need to reiterate is that deleveraging works both ways - if you have shorts, you need to cover and if you have longs, you need to sell. With a little intervention, deleveraging of a few insolvent institution's structured products and derivative trades in europe and the Russell rebalancing thrown for good measure - things can get weird. I especially do not seek to day trade days which huge gaps because this type of abberation can get extreme and is not predictable - though the action following it over the next few session usually is. We apparently got both types of deleveraging activity today with especially whacky behavior in names that have been heavily shorted - like Netflix for instance.

A highly likely scenario here is for a complete reversal of this candle and a break of its low tomorrow or Monday. Also, expect follow through on the dollar and on the EURO...there is much futher to go with these moves and the market will follow them.

I do want to recommend that you listen to this interview with Nichole Foss by James J Puplava in April this year. Its excellent and I find it hard to disagree with her on just about anything. Click on the title below to hear the interview:

The peaking of oil prices and the coming Depression. Resource Wars to follow.

Well, this was a reasonable way to wake up today...

It looks like my positions and posts are paying off...Personally, I think there is a waterfall decline dead ahead...I expect a breakout in the dollar to the upside and much lower prices in the euro in the short term.

Wednesday, June 22, 2011

An update from Bill Still...

Now we know that G-Pap really mean the exact opposite of all the things he said over the last few days...if Greece accepts all the bailouts then they will have exactly what the prime minister promised they would avoid.

Tuesday, June 21, 2011

Please, Please...try to pretend its anything but a short squeeze...

I will post some charts in addition to this commentary. My systems took new shorts today near the close. The reality is that this is a short squeeze and in no way changes my comments from the weekend. I have been travelling and its a challenge to put up charts...but the setup remains and I expect it to be triggered by the dollar. On Sunday, I posted that I thought it may take one to maximum a few days for the dollar to reverse...well tomorrow I will likely get the reversal signal that I look for at major turning points. I have posted each one as they happened with the dollar and each has been accurate nearly to the day...there is a possibility that the signal may not trigger tomorrow but its not very high at this point therefore, we added a lot of dollar contracts today near the lows (and euro shorts)...and I expect that we will be seeing the dollar taking out the 76ish highs very soon. Oil looks terrible...about time for Goldman to come out with another "Buy" reiteration. Silver is completing its bear flag while the EURO is ending its countertrend bounce in preparation for a 3 of 3 impulse pattern down. The markets are indeed in a precarious place and likely to face a sharp reversal at any moment that could trigger a waterfall decline. Longs - well, they will be dangerous but exciting if you like that type of thing.

Hot particles from Fukushima making there way to the US...

Too bad Fukushima is not an issue any more for the Lame Stream Media. In any case, in europe the incident is making the news significantly more than I have seen in the US.

Sunday, June 19, 2011

Ever seen a global margin call? This is what it looks like...

There are market participants that have done their level best to create the over-leveraged condition of our markets and the world. Due to those conditions we are now in a GLOBAL MARGIN CALL and the call has not been covered. It will be but it will not be a clean and smooth process, it will be hairy, smelly and very ugly. Anyone thinking that we have seen those conditions needs to reacquaint themselves with the flash crash and its anything but fat finger trigger. It, therefore, gives me pause to tell you that, based on what I see, I believe that Goldman Tax has established a significant commodities/energy short similar to the structured products shorts that they put on in 2007 and 2008. And this, while they are full on the bandwagon trumping up their story for "long" certain markets in the commodities and risk asset space and while selling any credit product that's not glued to any oil producing nation that will sign for them.

Goldman is showing long trades in many individual markets, commodities and currencies that represent simply atrocious positions and most likely a conflict of interest on the part of the firm if they were to be investigated. Personally, I want to know more.

I generated well over 100% returns during the last 10 to 11 months on medium risk level accounts that I would say ended up trading nearly the universal opposite of Goldman published trade recommendations. I do not specifically seek to trade counter to Goldman calls, nor have I attempted to do so in the past. The fact, however, that the majority of my positions have been opposite of theirs so often only became obvious to me after the pattern continued persistently into this year. But, point of fact, by being opposite their recommendations most of the time in the markets I trade, I made significantly better than 100% return. That must certainly put the Goldman client in a rather disadvantageous position since in the end I was apparently taking quite a bit of money from them...on my part, I am not putting out disinformation, unlike my perception of Goldman, who seems to have an affinity for taking a lot more money from their customers than those customers may readily think via what I see as nefarious means.

In any case, back to the markets. I see a lot of people looking at the dollar pullback on Friday as significant and for the proverbial bounce off the 200 day moving average to construct a perfect head and shoulders pattern from which to establish perfect short positions...I do not think that this market has the liquidity to produce those kinds of results...I think that there are many insolvencies in various stages of playing out. Many are in no small part being additionally fueled via the margin requirement reductions that were published just before the markets dropped...hey if you can lose money with 10 contracts of ES it must be better to be able to get has to wonder what the real basis was for reducing these requirements – it certainly was NOT the reduction in market volatility. I am still struggling to figure out how one of the most volatile markets I have seen can be the basis for reducing requirements. But the result is that as with Silver, the losses that many people are nursing are now larger than their gains from the “Buy the “F***in Dip” days and are likely to get much worse. What I see dead ahead is the global markets MARGIN CALL...and I think it will be unfolding imminently.

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