"The Crisis Has Just Started: Major Mkt Tactics"
June 15, 2010
1. The Cash Register. I’m a “Kachingo-Holic”. If I went a week without ringing the cash register on one of my investments, I would probably go into major shock and die.
2. Yesterday, I felt more like the Pinball Wizard, while goldland wondered if the June seasonal weakness will see the gold bears’ 10 millionth “it’s all over for gold, buy toilet paper now!” top call become the correct one. I actually believe the bears will call the exact final top for gold, and it will come after only 5 or 10 million more tries.
3. Gold’s blood relative markets staged some mindboggling upside price action over the past few trading sessions. It was a winning day on all cash register fronts for a boatload of subscribers, as yesterday saw gold drift a bit lower, while wheat, corn, natural gas, and the stock market all surged higher, like bulls on steroids. The bottom line?
4. Kachingo, Kachingo, and Kachingo!
5. The “Grains To The Drain” (GTTD) gang trade looks like they just put a million volt power line into their mouth and asked the banksters to turn it on. The banksters followed instructions and electrified the morons. The public is short wheat futures and I’ll bet you hard cash those positions feature huge leverage. Why would an undercapitalized micro trader bet against food, the one market that is arguably lower risk than even gold itself? “Enron, Fannie, and Nortel are solid long term investments. Wheat, corn and soybeans? Those are high risk, almost as risky as gold!” OK, Mr. Golf Ball Advisor, if you say so. The Grains to the Drain gang are short wheat, corn, and soybeans. All three of the major grain crops! A triple wiener play!
6. Obviously, I’m on the other side of the “Grains To The Drain” trade, as are the trillionaire banksters. All the way to zero, a war to zero. I wonder who wins this war, the leveraged insane asylum inmates on the short side of the trade, or the unlimited money banksters, buying major food assets to zero and the power to change market rules. Hmmm, that’s a tough one. The lower the grains go, the more I want of these timeless assets. My “problem” right now is they aren’t dropping. They are ringing my cash registers!
7. My “concern” is therefore that I don’t get enough of what is soon to be a currency, as the crisis intensifies, and causes them to soar to higher levels. Levels that are unimaginable to most in the gold community now, but not unimaginable to “dumb old men” like Jim Rogers. The risk to reward setup for food is so skewed to reward it’s almost surreal.
8. Tactics: Be very careful about what you sell on price astroblasts like we had over the past 48 trading hours. Do not be playing food timer. Don’t think you’ll get it all back cheaper consistently. Do not act in the foods market with the tactics of a prostitute, with one of the world’s greatest assets. You’re not that good. Do not touch your core positions; the cash register is for your trading positions only.
9. The price of food could hyperinflate, either partially or fully, and I absolutely believe food has the highest likelihood of trading as a currency as the crisis moves to the Japanese, UK, and US paper currency markets. The major government toilet paper currency markets are likely to be the next toys the banksters bring out of their crisis toybox to play with.
10. The only question is: Are you prepared?
11. The Canadian Wheat Board is suddenly calling the current planting the smallest in 40 years. The Grains to the Drain (GTTD) gang of leveraged morons, even more suddenly, is wondering what their “current strategy” should be. My suggestion:
12. Call 911 and the morgue and place an order for yourself.
13. There are also rumours that Australia could get a major locust hit. These are items that don’t even factor in the OTC derivatives nuclear bombs, nor the industrial revolution of Asia. Just basic fundamentals. If you factor “it all” in, I see the bear case for shorting foods with leverage as one concocted by inmates of an insane asylum. Maybe it was! If 100 nuclear bombs go off, and you mark the radiation to model in your notebook, does that mean nobody dies?
14. The head of Fannie Mae suggests bulldozing homes is for our benefit. High prices are for our benefit according to Fannie. Reality: It’s not my problem that Elmer Fudd lined up in the street to pay 5 times what the bricks and mortar are worth for a house, and leveraged his greed. The Iphone4 is going to be about $299. Sounds reasonable. The current price of most homes? They are still ridiculous in my view, and that’s after the fall. I’m not interested in buying any houses in a crisis that has barely started.
15. Falling home prices are healthy and will help end the crisis. I’d prefer they fell 90% worldwide and stayed there, so the average citizen forgets about trying to compete with China with the strategy of buying houses on a credit card, instead of building lean and mean companies. “I’ve got 50% of the new IPhone4s in front of the steamroller, and I’m going to destroy as many IPhone4s as possible to keep the prices high, for the benefit of America!” –Steve Jobs, Apple Computer Company? Or would it be, Steve Jobs, Insane Asylum inmate? Is there a valid case for committing the head of Fannie to an insane asylum? I think so.
16. The G20 meeting is coming up in two weeks. I’ve mentioned the “bottlenecking” or “gold in a jar” trading going on in the gold market. I do not expect a major announcement at this G20 meet, but I do expect the groundwork to be laid for the next one, or maybe even an emergency one, in the fall. The banksters are preparing for the next phase of the crisis, their devaluation of the major paper currencies and the undermining of confidence in the major govt bond markets. When you devalue your money, you devalue your buying power. As the world goes “one world” the “low currency to build exports!” benefits will be what, exactly? If the US dollar was suddenly worth a million times all other currencies, would you think YOU are in a stronger position, or a weaker position, than you are in now?
17. The big money is made in actual commodities. Because it is the safe money. If most in the gold community had focused on gold, silver, food and energy in a buy pyramid to zero, you would have had more money now, to buy the juniors stocks at the time they should be bought, that time being now.
18. Here’s a look at the wheat chart.
Wheat Chart Key: Fib Lines and Immediate HSR
Price has tanked from $11 to $4. Whether the “final” bottom is now, or $3, $2, or whatever, it doesn’t matter, not in terms of making you wealthier, if that’s your goal, and I’d suggest it should be. Think back to gold $252-400. The same morons that are short food now were short gold then, and the result will be the same: They will lose all their money again, regardless of any booked win here and there. Price has retraced to above the 23% Fibonacci retracement line at 4.46 and the first HSR (horizontal support & resistance) sits around 4.60. Those are both “enhanced” sell target areas. If you use my pyramid generator generate your sell points, those two areas can see you enhance the size of the sells slightly in those areas. Enhance NOT being translated into sell it all and try and buy it all back cheaper!
19. Natural Gas, which subs have bought into the exact lows with the largest positions, has launched a 25% price supersurge in 3 weeks! Kachingo! Here’s the chart.
Natural Gas Chart Notice we’re banging into a 3rd band of HSR since bottoming at $4. Is $4 the ultimate bottom? Who knows, who cares! Care about your cash register, not your market calls. Price is also banging into the 50% fib retracement of the fall from Jan 2010. Obviously cash registers need to be rung.
20. The Euro is a paper currency. Compared to actual commodities, paper currencies are penny stocks, in terms of ultimate total risk. Interest paid on the currencies can mitigate some of that risk. I’d suggest the time to do that is when rates are high, not at record lows! Trade against how you feel, more than on analysis. At 1.19 I started to really feel that the Euro was finished, so I added to some of my Pgen buys. There is enormous HSR is the 116-117 area, so I don’t view any penetration of the recent lows as a short-selling opportunity, but rather a buying opportunity, and a profit booking opportunity on long USD positions. Yesterday was euro cash register day. Here’s the Euro Chart Notice I try to do the enhanced HSR profit booking band points highlighted in red, and the enhanced buy points in blue. Red is sell, blue is buy. Red refers to a price band above current price, and blue to a price band below current price.
21. I do not like trendline channels, yet most amateur technicians are always drawing in channels. The banksters use price bands and levels, bombing areas. Use what they use, if you want to keep it simple. Keep it simple, if you want to WIN in the market. Notice that I’ve drawn in Fibonacci retracement lines on the euro. You want to do that as soon as a possible turn occurs. You aren’t guessing it IS the turn, you are simply preparing yourself to take action in the market, if it is. Predict price if you want fans. Respond to price if you want wealth. We can’t know if price will rise to the 23% retracement line or to any HSR lines. We can know that we will ring the cash register, if it occurs.
22. As we entered the weak season for gold in June, I immediately took delivery of some paper gold in physical form. Whenever you think price could weaken to a point it could cause you to sell out your position, do what it takes to manage that risk. I bet that you are far less worried about positions in your hand, than positions in your account. The question is, are you making use of that knowledge tactically?
23. Here’s a look at the Dow. Dow Chart Price has retraced 38% of the May smackdown. There seem to be very strong views that the market either rallies or tanks from here. All I know is I bought the lows and have sold a bit into the current rally. I would not be going into a G20 meet guessing that I know what the market will do. I would urge the shorts to look at the market and determine if the big reward that was offered in April is really still there. The crisis is young, and many more solid shorting “hits” will present themselves. Don’t “demand” the market do your bidding, or YOU will end up the one on the knees. As with the commodities, I believe the Dow becomes a currency as the banskters turn their weaponry towards the US dollar. That means you want to be a buyer of all weakness, and the risk-reward setup favours those who buy the market, and dramatically so. It’s a question of when the banksters reflate, not a question of if. Make time your friend. If you start the ordering the market to do your bidding in a timeframe, again, YOU will be the one doing the market’s bidding, not the other way round. Elmer Fudd Public Investor made a huge list of demands for the stock market in the 1990s (and is doing the same thing in bonds/paper money now). “I want this percentage return on my money, and I want it in this timeframe.” Ok, we’ll just serve that up for you, Sir, just as you ordered it. Should we put a cherry on top for you? The stock market watched millions of these idiots play “professional investor in their own mind” for a few years, then kicked the crap out of every one of the price chasing wieners. Don’t follow Elmer Fudd to his market grave. There are only 9 levels to the Dow, 9 gridlines to handle, of a 1000pts each. It’s not rocket science. It’s 9 price bands where you must be able to allocate capital to be a player, to be a WINNER.
24. All roads lead to GOLD, because this is the gold era, the era of the gold punisher. The banksters are owed hundreds of trillions from governments and funds who laid down OTC derivatives bets that exceed the net worth of the world! The wieners lost, the banksters won, and the banksters want their money. The wieners can’t pay. The crisis is not over, it has barely started. Because the banksters have just started to collect what they feel they are owed. Are You Prepared?
June 15, 2010
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