Tuesday, March 2, 2010

The Dow and Gold Today and Tomorrow.

It looks like the precious metals and stocks are going to take another stab in tandem towards a higher-high in this corrective pattern.  Gold has broken up about $15.00 per oz. at the time of this writing.



There`s not much else to report as per price movements.  Price retracements are taking their time and seem to be meandering up to drag as many into particpation as absolutely possible.  The beginning of major downtrends always take a while to play out and continue to accelerate into the latter stages as pessimism becomes the majority opinion. 
We are obviously not even close to that point right now in any form of investment.  With the major indexes yielding near historic lows and valuations much higher than historically average, as well as fear of inflation keeping money committed to paper gains (for now), time is ideal for a major shakeout of generational mentality towards investment.  Consumer Confidence is pounded down on the `current situation`survey, but still very elevated on the `future expecations`- and this is exactly the type of mentality driving investments right now.  There is no wall of worry here, but hope that fuels this little engine that (did).

The Euro should make a sizeable correction against the USD in the coming week or two, just to shake some of this mass of short speculators off the trade.  This should temporarily keep the price of precious metals and stocks at current levels or slightly above before a resumption of the bear market.

``Gold Breaks the Rules`` was the title of a front-page Yahoo! Finance article over the weekend and yesterday. 

Keep your head out there


MARCH 3 Update - We are transferring over the nameservers for the domain right now so if you have any difficulty getting to the site it's only temporary.


  1. My reasonably consistent (over past several weeks) prognostication (not to be construed as advise, use your own) is this week we will top out below $1161, then we will find a bottom around $1000 by April:


  2. Derek,

    I am very impressed by the 2nd chart, you clearly show that Gold has not broken back above the trend-line that this D-wave broke below coming down from $1225.

    My only quibble is why do you use non-logarithm vertical axis? I think your analysis is skewed because you need a log plot in order to correctly measure proportion change (% changes in absolute price). Note, I still see the same trend line and break below it on the log-plot of same chart at StockCharts.com


  3. The HUI seems to be repeating the exact same crash pattern as 2008, here is a chart:


  4. Derek,

    I'm long-term bullish on gold as a means of savings so I agree with you there. But I feel the technical charts on gold are a big part of the rigged casino. People are better off focusing on the fundamentals at this point.

    What happened to your DJIA channel? Can you post a current picture of it?


  5. For every article like ``Gold Breaks the Rules`` was the title of a front-page Yahoo! Finance article over the weekend and yesterday.

    THERE ARE 20 against gold.

  6. Derek - you sounds almost sad that gold is heading higher...not your usual excited self.

    And I have to pick you up on some of your wording, you continue to say that gold will 'resume' it's downward trend. Resume indicates it's been in a downward trend, when was that exactly? Looking at the last 10 years it's clearly been in an upward trend.

    Take a look at http://www.dailyfx.com/analyst_picks to get an idea of whether FX analysts are bullish USD or Gold. There's always 2 sides to the story.



  7. Can we move this forum to Facebook where it belongs..

  8. The more I think about it, the simpler it becomes.

    Gold was up +81% in one year, silver up +129% in one year!

    You think there is only going to be -15% and -25% correction respectively? Hmmm, maybe, but...

    Has the Fed truely created enough "real liquidity" (see "human action" in links below) to justify +129% move in silver? Or was the crash in 2008 not justified by fundamentals:


    The Fed is in control of the YoYo ruler we use to measure price. And they need to keep signaling deflation, as that is the only way they keep everyone in dollars while they inflate away the problem:


    I am not worried about the real purchasing power of gold, I know it is going up no matter what. But the price in dollars could possibly go lower for a little time.

  9. "I know it is going up no matter what. But the price in dollars could possibly go lower for a little time."

    Well, here I sit w/ bated breath.........I would dance a jig, if WE got another shot at it, around $750/$800..Before the REAL JIG is up.

    "And I have to pick you up on some of your wording, you continue to say that gold will 'resume' it's downward trend"

    I think, if you thought about it, you might unferstand Derek is talking off the LAST HIGH.......$1200+

    And, has it been trending higher, or lower than that............?

    That's the way I understand his wording, and meaning.

  10. Gold was up +71%, Silver +114% in one year from 2005-6. The correction was -25% and -37% respectively.

  11. Hey I did not say "I know it is going up no matter what", I made a distinction between price and purchasing power. If you do not know the difference, then you won't understand what I have been writing about.

    I am saying price can move down for a while more. But I am saying the purchasing power of gold is rising always in this epoch.

  12. Let me explain what "purchasing power" means. If gold falls -25% but copper falls -50%, then I can buy 50% more copper than I could before the price of gold fell by 25%.

    Do you see why people get so confused?

    The Fed is taking advantage of this confusion, to make us think we are in deflation, when in fact we are in inflation.

  13. Thanks Derek for including the DJIA chart too.

    always appreciate your posts, don't let the Gold Bug bickering in the comments get you down, I think there are a lot of others who get value from this site as well.

  14. Hey Ian,

    Dow 12,000 S&P 1,200 and $1500 by OCT. Love the March 1st Rally!!

    Remember, people aren't heavily on margin as in 2008!! That's why gold will continue to climb. People had to sell gold to cover margins in 2008!

  15. Derek,

    Anyone can throw a dart at the wall and say Gold is going to go down. The fundamentals are are way more powerful than a short term chart. You are playing with fire IMO. I enjoy reading your opinions even though I don't agree.

  16. One guy said for every news piece for gold there are 20 against it.

    Two things.... for every Peter Schiff warning of the real estate bubble there were 50 'experts' telling him he was wrong. (He is bullish on gold too).

    One claim made by goldbears is the psychology is too favourable for gold so it will fall. IF you are right that there are 20 bearish opinions for every bull I'd say the psychology is not that of a bubble.

    As for the "resumption of the downward trend" does a 3 month correction in a nine year bull market really constitute a 'trend'. Ok it's a 3 month trend but I can pick so many arbitary trends - the 1 month trend (up), the 6 month trend (up), the 1 year trend (up), the 2 year trend (up), the 5 year trend... Why will it resume the 3 month trend and not any of the others, especially the longer term ones?

  17. Derek shorted oil in December 2007 at $92.

    ‘BIGGEST REASON: Oil prices have reached a top, which I will show in the following chart, and have formed a head-and-shoulders pattern coming down the other side. This generally means that a large crash-down in price will be occurring in or over the next 5-15 trading days. I am very excited to take this position….
    …My estimate is that the price of crude oil will be somewhere in the mid-high 70's by April giving me a tidy 20%+ gain.’ – Derek 12/16/07.

    What happened – Oil was trading at $140+ in April before crashing.

    (To be fair he did recommend setting stop loss at $94.4 and mentioned it was a risky trade but a wrong call there).

    Then he was calling for hyperinflation…

    ‘Also avoid USD denominated stocks and find ones that have revenue on hard assets in a basket of currencies. This provides a hedge against the hyper-inflation that USD will experience in last 2009-early 2010.’ – Derek 12/26/08

    But has become a deflationist now and pokes fun at those whose views he shared just over a year ago…

    ‘I know it's a trivial study but I found it a humorous response to those loudly ringing the inflation bell and saying that theirs is a contrary view.

    You would figure more people would be aware of a worried about deflation, since the Federal Reserve sits shaking it its booties at the mere thought of it (and well they should, because they will be powerless to stop it). And yet, fellows like Larry Kudlow on CNBC have been talking inflation for months now - I especially remember a Peter Schiff interview where Peter was talking up hyperinflation and Larry was nodding vigorously. They ended up ganging up on a bond trader who thought yields would be below 5% on the 10-year T-Bond for the next couple of years.

    People have come to expect inflation as a normal way of life - they are soon to discover that nothing could be further from the truth, as we experience a historical phenomena over the coming years.’ – Derek 02/24/10

    Derek is another talking head, just like Jim Cramer. Throw sh*t at the wall and claim credit for what sticks, ignore what doesn't.

    - Chris P

  18. Chris P,

    Seems to me you have just explained how much foresight that Derek had. First he apparently predicted the fall in oil to $40 a little bit earlier than everybody else. Second he apparently predicted the inflation we've had in 2009 with copper and silver doubling in price. And now he appears to have slightly early on the prediction of a deflative correction.

    It is not that he (nor I) are flip-flopping, it is that the PTB apparutus is continuing to zigzag the levels (mostly the mass media) in order to keep the their true actions hidden and keep "human action" (i.e. inflation expectations) from runaway hyper-inflation.

    Understand the link I provided above, that Mises showed that the difference between hyper-inflation and frogs slow cooked in a pot of hidden inflation, it is the degree to which humans have decided they are being cooked and need to jump out of the pot.

    Derek is providing great analysis with can aid our own independent (free market) decisions. I repeat that after +129% gain in silver, we are due for a correction. If the world has truely moved to hyper-inflation "action", then no correction. Which is the reality of public perception? I say CORRECTION!, shelby

  19. I see here emotional posts attacking Derek and the possibility of further correction. Gold bugs think that after +81% gain in one year, that end of the world must happen tomorrow, and that their gains must continue to spiral upwards, rewarding them for having the bought the correct assets about 11 months before doomsday.

    This is giving me more evidence that Derek may be correct, that we need more correction in order to deflate the over-inflated expectations of a very small < 1% section of the market.

    Fact is that the inflation expectations of the masses, is what determines whether we are in inflation or deflation. Go read the link about Mises I provided above.

    The crack up boom will go through many phases. Gold bugs need to understand that even gold and silver will get overbought relative to the expectations (the MASS/inertia) of the masses, shelby

  20. The Correction occurred in 2008 to March 2009 in Metals because people had to cover margin calls and the rush to the Bond bubble that has not pop. I should add oil and other commodities.

    Nobody has mention of this BOND BUBBLE so there is a bubble atleast in this forum.

  21. I have a method that I use to trade. I'm so super cheap and GREEDY. I won't discuss on this blog. I hoped you enjoyed the March 1st move :)

  22. The BOND BUBBLE is a function of the inertia of the masses, and it is much larger ship and will thus probably take longer to turn. Please again go read the link I gave above that explained how Mises had shown that what matters is not how much money is printed/created, but how the masses react to it.

    The gold bugs are too impatient, they expect the world to change as fast as they can see things happening, but the masses can't see these things, and thus gold bugs compete with each other to pay too much for gold in a frenzy, then there comes a correction.

    The gold bugs are correct about the long-term outcome, shelby

  23. Thus Bernanke is no longer an enigma. Understand how power corrupts:


    Bernanke sees the opportunity to "help the world" by easing the re-balancing of the world, by bringing the USA down slightly and the developing world up. He knows this can't be done politically with a "hard-down" (stampede) move to gold, because it would cause the public's expectations to turn catastrophically bitter and extreme, there would be probably war, etc.. because the USA is so bankrupted. I think it was seen as politically expedient to the cause of humanity, to essentially devalue the westerners relative to the developing world in the most invisible way.

    Bernanke is getting to apply his 1500 SAT IQ and his theories to the big game-- the entire world. He must feel so important and validated right now.

    Go back to what Mises was teaching-- that inflation or deflation is a function of the mentality of the masses, not how much money is printed or not. The absolute levels of debt and M3 will matter, but not until the public decides they do. Those increasing levels accelerate the pressure but nothing truely breaks fast until the herd stampedes (by then it is far too late, the corral was long ago closed-- the west is bankrupt).

    Bernanke will fail, as power always corrupts the end result. Centralization of decisions (not free market) always fails. He is simply making the problem much worse, but I am sure he thinks somehow he can inflate the developing world and balance the world in time. But he doesn't realize that he is causing massive mis-allocation of resources in developing world too, just as Greenspan didn't realize:


    Greenspan idolized Arlyn Rand instead of the wisdom of the Bible. Bernanke idolizes Mises and wants to apply his theory. Bernanke doesn't idolize Keynes, rather Mises. They all failed the 2nd Commandment, and thus have failed to understand the free market (Biblical capitalism).

  24. Well,
    If they go with where the IMF, and Sarkozy,others want.

    What will our PM's be worth?.
    The clarion call for a new Global Reserve Currency, is geting more action.

    Go to SDF's(or a variation therof), and the do what they have done from day one.

    FIX THE PRICE OF GOLD!.( well below $1k)

    We know this will not be to OUR advantage value wise.They cannot have Gold as a massive store of value, fighting the SDF's( whatever they call it), for the position of real money............

    The ONE world currency.

    I see this as a way to take savers, like PM folks back to semi poverty.

    The Movers always figure out a way to Win.

  25. They can't fix the price of gold, only nature can do that. They are cooperating with nature right now, because the masses made the decision to enslave themselves with massive debt (Bible says, "borrower is slave to lender"). But those who don't have debt can buy gold & silver and force the masses towards their slavery. But we can't get too greedy or too impatient, else as the Bible says, "wealth has wings and flys away", (paraphasing) "the bigger army destroys your security and steals your gold". We must be saving in gold and silver for the purpose of re-investing it in a renewal of the debtors (Jubilee every 7 years), otherwise it will be taken from us as with the 3rd man who buried his talents in the Parable of Talents.

    All the financial wisdom (engineering) is already there in the Bible.

    The gold bugs with the correct attitude and patience and unselfish intentions, will be rewarded, shelby

  26. You didn't think nature (God) would allow you to 2nd mortgage your house, buy gold and come out ahead did you?

    This is why there gold can not go up +81% in a year and continue to do that every year. This will be a long bull market in gold, and it will destroy those who are trying to leverage it with usury.


  27. Suckering us in before the selloff

    Jason they are using you as a marketing tool


    Understand that they are trying to forment right now the illusion among gold bugs that China is going to hold the price up (the reason for the IMF news and China buy rumors, but the reality is we are headed for another major correction, BEFOFE we rocket up.

  28. Shelby - this is Chris P.

    You said...

    "Seems to me you have just explained how much foresight that Derek had. First he apparently predicted the fall in oil to $40 a little bit earlier than everybody else."

    When oil was at $92 he saw a head and shoulders pattern that indicated that oil would drop to the mid 70's and fall over the next 5-15 trading days. He recommended a trade to short oil at $92. The trade made $0.

    If you see that as prescient when oil climbed to $147 and then collapsed to $40...

    This was a short term trade not a prediction of oil's general price movement. If you miss the mark by that much when trying to trade you're going to lose a lot of money.

    I don't think anyone could see that oil was going to climb so high and then fall so low. I certainly didn't see it coming. Having rode oil up since 2002 (I'm a long term investor) I was too confident in peak oil and did not see the bubble. But predictions of these timeframes are fraught with unpredictable moves.

    Gold has been in a bull since 2002 (I've been riding along since 2007) and Derek does seem to share the long term view that it will climb as the fiat currencies collapse.

    The attempt then to trade a short term fall in gold prices could prove to be as profitable as the oil trade was and could convince some of those goldbulls to sell at this point. But what if he's wrong? Is it worth the risk if we all think gold is going to going higher over a longer time span?

    You then said...

    "Second he apparently predicted the inflation we've had in 2009 with copper and silver doubling in price."

    As for his (and you're?) position on hyper-inflation vs deflation I'm confused. He stated in late 2008 that he expected to see hyper-inflation by now. So you picked two commodities and claimed he was right? Huh?

    You also said...

    "And now he appears to have slightly early on the prediction of a deflative correction."

    Uh... that means we don't know if he's right or wrong yet.

    I don't know if we are headed for inflation or deflation. I'm expecting high inflation but I could be wrong, we'll see.

    I don't mean to sound "attacking" but you guys do seem to be beating up and patronizing gold bulls. An making fun of guys who are still expecting inflation. I don't get it. You talk about Mises and crack up booms so I can't help thinking that on some level we're on the same page and that we're arguing about a storm in a teacup.

    Chris P

  29. Chris,

    Thanks for the clarification. I think many things can get confused, because this is a complex epoch and the terms we all use have many different definitions.

    1) EVERYBODY will fail on short-term predictions. There is a very wise saying, "an analyst is only as popular as his last lucky prediction", meaning that all analysts fail. The way they make money is by selling that failure to others. So if you want to talk about the success rate of short-term predictions, then I am not interested because I already know whether it is Derek or your dog barking depending which color bone you pull out of the dog treat box, the answer is ALWAYS exactly 50/50 over many predictions.

    ...continued in next post...

  30. ...continued from prior post...

    2) I am a gold+silver bug, but I am saying that we are worst enemy when we think the inertia of the masses is going collapse fast and that gold price will skyrocket and never significantly correct, and the dollar will fall like a stone by 30 or 50%. Rather I am saying that Bernanke is using Mises's work!!! And that we have to be more patient because of that. Mises said 2 main things. a) that quantity of money created is irrelevant in the short-term except as to how it influences the masses expectation of inflation. Bernanke is using this, and is hiding the inflation cleverly, by exporting to the banks and the developing world. b) Mises also said that eventually the money creation overwhelms and there is a crack-up boom, but the timing of this is unpredictable and can be very sudden but also very delayed. Gold bugs have their emotions and expections on a short fuse. We are talking about the inertia of the entire world, that is going to fight to socialize all the defaults. And the developing world can absorb a lot of inflation still (a lot of inflation can be effectively hidden there from westerners because as commodities rise, houses fall, so net sum 0 in west). This is why the PTB/nature first made the 3rd world as poor as possible and did not interfere with the resulting very high birth rates. And that poverty was made possible by BOND BUBBLE and sending all the capital of the world to the west.

    So Bernanke is not really following just Keynes. He also using Mises's theory, but he ignoring the other part of Mises's theory that the crack-up end result is inevitable. I think perhaps Bernanke has calculated what the developing world can absorb and feels confident. But as with Greenspan's admission of failure, I think Bernanke will fail because the centralized methodology of capitalizing the developing world via carry trade, pegs, swaps, etc is very mis-allocating. For example, it allows the Chinese to have a monopoly on big business in Philippines where I am. No white man can invest here in that level. It is still a protected economy, just as I think China is in reality. I could go on and on...

    3) Longer-term trends can be predicted based on fundamental understanding. Short-term trends based on extracting market psychology from chart patterns is dubious. Find me any one with a documented record that is better than 50%/50% (success/failure) over many predictions? I know of no such person that ever lived. Btw, Goldman Sachs told us that oil would go to $140 a few days before it blasted off, and I remember reading that and thinking to myself "they are going to manipulate the oil price higher so that they can take gold and silver down under cover", but I have also been wrong 50% of the time too on short-term predictions.

    ...continued in next post...

  31. ...continued from prior post...

    4) Thus I really don't trade on the short-term, and I not advising any one to. But in terms of dollar cost averaging into an investment, I agree with Stewart Tompson, that it is better to wait and buy on dips (and not selling on rises for your core PHYSICAL gold and silver). Buffet says buy when everybody else is dying to sell (blood in the streets). If we discipline ourselves to buy only at those times and ignore price run-ups, then we will on average have a lower entry price. We also provide a service to the market, of liquidity when others need it, and we can help smooth out the volatility in the market. It is really about being totally non-emotional and having a hard set of rules about when to buy (i.e. buy when ever the price is not greater than the 50 or 65 week moving average, $1050 and $1000 roughly). I had already stated it was a mistake for me to not nibble at $1050. I am hoping we get back to 65 WMA, but we may not. As for a plunge below that, we really can't plan for those, except I never want to spend all my cash at one moment in time, unless it is clear "blood in streets" event such as end of 2008.

    5) I think Derek is raising valid thought process about inflation versus deflation, and I have tried to add my 25 cents to that. His short-term timing calls notwithstanding. I think it doesn't serve any end to tell people one analyst is worse at short-term than others. We are all equal, we can give you the prediction with same success rate as flipping a coin. However, the deeper discussion about fundamentals and the role psychology plays is useful to help maintain an aforementioned discipline.


  32. I know there are those who will tell you that there is no more silver and no more gold in the world. It is similar to those who say that that land is dropping from 2.9 to 0.8 acres per person and thus farming land is scarce (yeah like that change happened in past year?). Or the famous silver guru who worked for company that was gouging junk silver bag buyers. Realize someone usually has a motive for selling you some great idea.

    There is no such rush. Any one is a rush will never be able to get a good price.

  33. So let me summarize actionable items:

    1) Always wait to buy gold between 50 - 60 WMA
    2) If SPY falls -5% below 50 DMA, then sell all stocks, ETFs a major crash is underway:




  34. I agree with your post. Though I think you have changed your position with regard to the reliability of Derek's short term predictions.

    I agree with your stated view that analysts that make short term predictions rarely beat chance and may be wrong as often as they are right. To me this makes the whole business of short term trading predictions at best a waste of time and at worst a way to lose money.

    There are those who can trade profitably (Paul Tudor Jones) springs to mind but it's funny those guys never seem to share their thinking. It's like those that can do and those that can't preach. And PTJ has stated that he assimilates a vast array of information not just a chart pattern or two.

    I'm a long term investor, but when someone says gold will fall below $1000 and possibly hit $650 I read it and take notice. That's what happened here but I'm satisfied that I should stay where I'm at (long gold & silver) and ride the waves.


  35. Shelby...

    What part of the Philippines are you in? My wife and I have property in Davao.

    Interesting reading yours and others comments here.

    Any advice for moving physical gold to the Philippines? Best to sell here (Canada) and re-purchase there?


  36. Just wanted to add a comment in regards to the early 2008 oil trade recommendation.

    If you actually read through the entire post, and the subsequents as well, you will see the following:

    - I recommended a short-sell with a tight stop out based on the pattern
    - I ALSO noted that if the stop was hit, and the price continued upward to the top of the head, that indicated that another mid-term uptrend was underway, and that one could go long with at least a $20.00 per bbl profit target in oil.

    This does happen occassionally with h/s patterns (see SP500 / Dow in July - H/S pattern, but top of headline was breached and higher highs were attained by the broad indices).

    And finally, if you HAD taken my recommendation and not used a stop and just held on with gritted teeth, you would at least have been in the money - the open interest that piled on LONG as the price of oil soared over $100/bbl left many caught holding as the price plummeted from $140 to THIRTY-FIVE DOLLARS.

    Imagine losing 75% of your money on that trade. Imagine losing how much more if someone were leveraged invested!

    Either way the whole story isn't there by whoever posted the oil trade, and I certainly indicated that a break of the top of the head would indicate another larger move upward. However I also indicated the biggest move would be corrective and would be coming soon. It did. Just a little later than I thought.


  37. Remember I mentioned technology in the discussion about farm land in the prior Derek blog last week.

    Apparently Buffet is investing in technology services (what made Ross Perot a billionaire):





    I suspect that he calculates that services that have unique technologies can retain pricing power and keep pace with any globalization "inflation" (transfer of wealth, re-balancing, e.g. double-digit inflation in China creating a 300 million middle class in past 15 years)

  38. Chris, email me antithesis at coolpage dot com

  39. From CNBC: "The Financial Times reports that Goldman Sachs, JP Morgan and others are buying warehouses to store precious metals, explains Brian Kelly. I take that to mean demand isn’t there right now.

    I take that to mean they’re betting on much higher prices in the future, counters Tim Seymour."


  40. (I forgot to include a follow-on comment by Karen Finerman):

    "I have a hard time trusting the action in commodities, adds Karen Finerman. In the past when the price of copper went up it was because it was going to be used - that was bullish - but if it's landing in a warehouse, I can't help but wonder won't supply flood the market at some point down the road."

  41. It is human action that dictates prices not the quantity of money.

    Very true, Paul, but 'human action' is a vague expression without qualification.

    For example, there is human action involved in the money supply itself. There is human action in the distribution. And there is human action (the part to which I believe you were referring) in the use by the recipients.

    But then we have 'the recipients', and 'the recipients'. By that I mean, if the quantity of money is not 'buried', metaphorically, or literally, but used, then there is an extension of recipients, of varying 'denominations' until it completes the circle and returns
    like a boomerang to more or less where it started.

    But there is another 'human action' that does not necessarily touch the 'filthy lucre'. and this is a very important one in determining the 'human action' of those who do.

    That is 'The Media'. Any psychologist worth his salt knows that thought precedes action. The quality of thought may vary, but thought there must be if there is life. 'Cogito ergo sum'.

    It should not need further explanation from me to know the point being made, however, just in case...........

    Those in the most highest of places who better understand money, psychology, and real economics (as opposed to the drivel espoused by Academia, Austria, Friedman, Adam Smith et al), like the cunning, astute, financiers that they are, did not get to where they are by being idiots, whatever anyone may think of them.

    Successful businessmen even of the lower orders, always have 'a business plan'. Therefore, media would naturally be enlisted to help direct that plan of injecting an increase in money supply so that the 'human action' required would be the one that ultimately resulted.

    Or, is this some idea that would simply be over their heads?
    Mais Non!. The only heads it goes over are the heads of the masses, often referred to as 'the sheeple'.

    That is a well fitting epithet because it is the nature of sheep that they should be 'fleeced' regularly. And so the 'masters' of the system, or as Boris Johnson, mayor of London addressed them face to face - 'Masters of the Universe' - they duly oblige.

    Ray Newton London (Financial capital of the world) UK

  42. Apologies. My first attempt did not connect, I re-entered but the wrong post was 'sent'.

    It should have started with -

    "...It is human action that dictates prices not the quantity of money...."

    Referring to a comment by a contributor
    at Kitco.

    I agreed, but then made the observations that followed.

  43. Derek,

    Don't beat yourself up about trading advice and misunderstandings or perhaps someone plainly and outrightly not following the stated advice or big picture. Investing/speculating is always a risk. You just keep doing your thing and filter out the noise.

    Craig Sicinski

  44. errr, outrightly? OK new word just invented:)


  45. Craig,

    It is pretty obvious to whom your post's comments refer.

    I do not think anyone providing a blog, or forum, whatever
    that deals with the financial markets needs to be told 'not to beat himself up' over any contributions that deal with the markets so long as they do not contravene public decency, or offend personally.

    They have usually been involved with the market long enough to know that there is much that gets brought up that
    has relevance, and it is often the ignoring of that which may appear to the mass as irrelevant that invarioubly causes their downfall.

    Hence the broad spectrum that is usually brought up and discussed on professional sites, and by professional analysts, and market traders who make their living in the markets.

    I do very well, and it is my main source of income, today. However, this was not so some years ago before I learned that which I share here with those who can read, and can think for themselves.

    When you go to a buffet, you can look at everything on display and chose to eat that which appeals. But you do not
    make nasty comments, or give advice on buffets to your host about that which does not tickle your fancy.

    Just pass along. Or, if you like, you can give evidence that supports your view against any statement I make which you feel is incorrect.

    Look at the title of this blog. Is it one that indicates 'selectivity' in theme. On the contrary, it suggest wide in scope on the subject that forms the main root.

    It is not new words you need to think up, it is some new ideas how things just might be outside your current range of thought which appears causing you some unease.

    Incidentally, I am not offended. Not in any way.

  46. Ray,

    Ummm, Okie dokie.


  47. One of the biggest mistakes technicians make is looking at the recent past (1-2 years) finding a similar pattern and projecting it into the immediate future, expecting it to repeat. Just because there was a selloff in 2008 and everything else looks similar is exactly the beartrap that will get you killed this time around. There will be a small corrective wave after it hits 115 for 1-2 months max and after that up. Jerry

  48. This is playing out very close to your analysis. If it continues, this would be a reasonable point to consider shorting. What do you think is a reasonable stop 1162? At what point would you actually admit you missed this one and go long above say 1175 or the prior November high?

  49. Yes please short! Remember according to Derek we are going to silver $8 and gold $650...!
    Short like no tomorrow,...if i were you i would bet "the farm" here!