MY MY MY
I would love to say I told you so which I did, but I said that a few other times over the last year in this market and this never happened. However, the timing on my recent comments was awfully good in this market. As we watch a futures meltdown take place across the board today we have to keep a few things in mind.
First, I know many of you might be thinking I wish I was short Silver. You can see from the high this has moved over $63,000 a contract already. This is the trillion dollar trade I told you someone with big money was going to catch. However, if you are trading this market right now you are an idiot. Yes I would love to be short here of course. However, this was an impossible trade to catch unless you played it the way I suggested the other day with options. When a market moves this far like this going parabolic, it becomes a complete guess as to where to exit and or short it.
Second, small investors were pushing this move, so you can see how quickly things change when they get trapped. It is what we call the weak money. They get in late and bail fast when trouble starts. As much as I try to fade these guys, in a situation like this it has been impossible. They have been driving this market for a year or more. Watching what they were doing was of no help in timing this even though we knew what was going on.
Third, do not get caught into trying to hone techniques for fading the trends just because you see Crude and Silver crashing. The Crude was very obvious and easy to spot and I called that out here pretty accurately from the COT data. Of course T Boone Pickens was of great help. The minute he starts calling for a big move up it is always time to get short immediately even if it means breaking your ankle to run to your computer to do it.
If you look back at the charts I posted when I talked about his market you can see this is playing out just like the early 80's top. Of course it is. The it's different this time arguments are always exposed after the fact. I saw a prominent metals bull the other day say that Silver could drop 50% and still be in an uptrend. What? How in the world could something decline by half and be considered to be in an up trend? On what time frame, a millennium chart? I suppose if you are a long term player and are convinced of the Doomsday scenario and that Mad Max will want your Silver in exchange for water, a 50% drop is a buy. Ironically we could see that amount of drop in just a couple of weeks time. We have already dropped 26% in just 8 days. The same group also essentially called Soros an idiot for selling his Gold claiming he must be reinvesting it in some other form of metals play. I am no fan of Soros at all due to his anti-American ways, but he is one helluva trader. For someone to say this about him, that he could buy and sell many thousand times over, is just another sign of a top. Does anyone remember when Buffett was being called an idiot by Ron Paul for putting that money into Goldman Sachs?
When a scrub calls out a star on something, trends change, that is the lesson learned here.
Gold has not changed it's daily trend yet. This is more a sign that Silver was just a blow off type of situation. Although Gold is not a buy yet, it appears to be setting up a long side entry here in the next few days.
The problem I see with the Gold long right at the moment is most of my short term things are still going down. I really want them to turn back up before getting involved here. If it does not hold here the game is over here at least for the time being.
The Crude market has rolled over and now appears to be in sell the rally mode.
I have shown Heating Oil because as I have been saying, this was the weak link in this complex and it has broken the most. We need to be looking to sell rallies here if we get them. You can see I have a ledge in price outlined that we broke from. This is a great short term pattern. Wait for one side to have a false break out then when it goes out the other side of the ledge take the trade. If you look through charts you will see alot of these trades work really well.
There are many markets now including the currencies as of today that appear to be beginning trend changes to down. We need to look to sell the bounces pretty much across the board. Remember, the world is still one trade thanks to the evil empire so keep that in mind with risk. Konrad, like you, I do not see any setups jumping off the board at me. I do have some short stock positions that are making some money, but I am flat I hate to say in futures right here.
The last chart for today is that of Copper, this market continues to lead us down.
We do have the NFP report coming tomorrow, but that report is just an absolute joke nowadays. It is so doctored that it is worthless in all honesty. Just ignore the noise and also Mark Zandi telling us how great it is no matter what is in it. I think he would say it was great if it showed the rate at 20%. I would expect it to show a gradual improvement again to be consistent with the BS story they are trying to sell us about how great everything is, but who knows.
Keep your powder dry, we have a potentially good window coming up for some shorts on bouces here.