re:off topic again from bill cara`s website
Commentary from the CTAB trader’s conference call:
As I spent most of the day and evening in bed yesterday, and may today, these notes came from one of the CTAB traders, an American, that reflects the level of concern people have and how we deal with it in the market:
Thomas Jefferson is rolling over in his grave. This country has sold Herself out. I am sick to my stomach. The Fed buying $300 billion of long-term Treasuries? Are they going to Fort Knox to empty out the vault and buy worthless script?
Terrific Timmie's traders had a field day before the Fed announcement, shoving gold down over 30 dollars, trying to incite panic among technically inclined holders as trend-line levels were taken, key moving averages violated, and downside momentum accelerating. All he did incite was a run on the US dollar as holders of the greenback now see the writing on the wall. Game over; it was a hell of a 200 year run.
Gold (GLD + 3.11%) had 65 dollar range today, now on the launch pad for a historic parabolic rise. Once gold takes out the old high, look for a day where it soars over 100 dollars (I am in agreement there).
They say don't fight the Fed. It may take a while for a short bond position to become profitable, but once the Chinese (they've already publicly stated their concern over US monetary policy) spring into action selling bonds and buying gold, the US is going to be in a real bind. Bonds will then be toast.
The equity market respected the 800 level intra day on the S&P (SPX + 2.09%), falling 2% after reaching the first resistance. As a trader of almost 30 years, I have learned to stay with the trend, until support levels are broken. As an American, however, I feel violated, sensing a tidal wave of societal rage about to destroy our country. I just cannot believe how our politicians have confiscated my children's future, violating everything our Constitution stands for.
The United States government is devaluing the dollar, monetizing debt. Over time this is incredibly inflationary. The Obama administration has embarked on an unprecedented spending spree, constantly telling us "government knows best." Never in the history of civilization has government come up with the best, most cost efficient solution. Citizens are now numb, unable to conceptualize the money being spent "to fix" our problems. Too many zeroes.
Technically, gold has been consolidating for weeks, and it has been unclear whether prices were going to test lower resistance levels, or surge to new highs over 1000$. We have been patiently waiting to add to our largest position, and today's violent reversal was our trigger to add to positions. The confluence of support tested today-trend line, moving average, fib support-gives bulls an area to stop themselves out if gold prices retreat.
Once gold turned, we aggressively bought calls in AUY, GG, and bought SLW stock for new clients.
If gold spikes in the next 2 days we will have 20% of our funds in this sector. We purchased a lot of GG March 32's. If GG goes over 32.5 we will have close to 10% of the portfolio in GG. We bought a lot of AUY April9 calls at .30 and they went out at .70. Trust me we are ready to step up the risk profile if you think clients can handle it.
That’s always the dilemma of a professional portfolio manager. We have a duty to manage OPM according to client wishes, and we know we are dealing with a dynamic situation – one that can change by the minute as we saw at 2:15pm yesterday.
I have written on various occasions that, in a normal world, my threshold for gold goes to a maximum holding of 8%. In an extreme world, my limit is raised to 12%. A week ago, I advised the traders to step heavily into a high-risk gold prospector stock (UXG), which was a reflection of my changing mind-set. Then, two or three days ago, I saw the downward pressure on the precious metals as a sign of immense intervention ahead of the FOMC decision, which concerned me that something like what did happen yesterday would be the case. So, I made a tough decision and advised the traders to increase the position to 20% precious metals, either on further weakness or, if we got blind-sided, on a break-out.
I am letting you all know what’s going on here because these are historic times, and I want it down for the record.
What we are doing today is serious business. We have no time for the usual nonsense that goes on in the media, including the website and blog media. We are not talkers; we are actors. Decisions have to be made, and difficult situations managed. Trading is not entertainment.
Now you see why for years I referred to the CNBC media personalities (for the most part) and the talking heads they bring on their show as clowns. There is nothing funny when it comes to money.
I was so happy when comic Jon Stewart of the Daily show made that point so obvious to his viewers as he chewed up CNBC buffoon Cramer and his associates. Stewart deserves an Emmy Award for that program.
Washington is in disarray. It’s time the President stops talking, and starts acting. |
