hello pezz, early morning report:
(i) woke up to the sound of chirping birds as usual, at 5:45am, watched peregrine falcon swoop down and ... i closed my eyes ... one less chirpy, and one more breakfast for hungry little ones without a doubt ... the forest is still green, ocean aqua calm, surf undulating, and all creatures awaited the rising sun … I do not quite know how to work in the ‘dark interregnum’ and ‘shadow of valley of you know what’ … but you get the idea. Where was I? Ah, yes, oh, and I went jogging, as usual, as for the past three days, reviving an abandoned habit that I actually do not really care for.
(ii) follow up the earlier report Message 24528464 that has embedded links to the start of our on-going discussions, I checked out some suspicions I noted at that time, meaning 2002/2003, and I state again, that we do not know the beastly market that we have never dealt with before, there will be lots of chirpies sacrificed to the market god, but not before lots of maiming, torturing, cracked false hopes, dashed true wishes, and then … we must avert our eyes, hear the screams, and imagine what must be going on;
(iii) anyway, as a chirpy excitedly noted - the said chirpy gets excited about a squiggle here and a wiggle there, because, I suspect, that is all the excitement there is in his sorry and lonesome life, but I digress – like I was typing, the chirpy wrote, ‘Gold getting pounded. Bunge in reverse. Pot getting hammered. My account equity is soaring!!!’ - can you not just hear the hyper mouth breathing, and please note that the alleged account can be supposedly soaring on just a few claimed trades, meaning the account is just like that probably small appendage the said chirpy is not secure about – oops, I digress again, and naughtily so, forgive me; to continue, i feel the merciless pounding on bunge that had the following transaction history:
Message 23899299
<<BUNGE finance.yahoo.com @ 99.11>>
Message 24426253
<<(ii) Shorted a bunch of finance.yahoo.com BUNGE Puts July strike 85 @ 9.40>>
And hope I get to do it all again, and next time, sideways.
(iv) The good news? Oh, yes, as Maurice Mq noted, gold is mercifully trending towards its start of year pricing, so that we who were not as faithful as we could have been can rectify our mistakes, and load up on the year's quota and while at it, load up for the next several years as well – I need, as in I have an absolute imperative, to fill an order to acquire a certain weight in off balance sheet physical gold normally to take place for the next 14.5 years, in exchange for forever worth-less paper currency now in existence and destined to reset.
I am thinking that it is best that I simply buy the whole lot in one go and be done with the program here and now, given the opportunity that could soon be.
Maurice Mq says “marlakey” and that one cannot see speeding two cars without break fluid travelling at speed in opposite directions towards each other and conclude wet result will happen. Yes, it is however simultaneously true, as I noted often enough, that we cannot possibly know just quite when, how and how bad the mangling will happen. Goldless and unscientific Maurice Mq is either lacking common sense, or is counting on divine intervention.
(v) I suppose one could sell paper gold in the interim, suffer possible regret, or even short paper gold against one’s on and off-balance sheet physical hoard and take up serious danger, particularly under the circumstances that is apparent as all unfaithful rush for the exit door to the gold trade, but why, in view of the imperative to save one’s capital from the depravity of the officialdom, as in why bother trying to nickel and dime a trade that is now elevated to be the absolute imperative? Do the Russian central bank and the Saudi oil royalty trade against their gold which they mean to accumulate?
I have attached some e-mails in the in-tray for your morning briefing, in reverse chronological order:
Player 1:
All valid points and maybe by next week this rally is over but technically I would expect this rally to go up to at least 1416 level, which is 50% retracement of the Oct-Mar downmove...1454 is 61.8% retracement.
Hard/soft commodity plays starting to get hit hard (eg. BHP, MON, ADM, POT on record earnings and guidance...tells you top is imminent or already here for that stock although you will get rally back up) and if oil cooperates then inflation fears will temporarily subside lending boost to stocks, esp financials. Still bear mkt rally but we could work much higher than anyone expects.
This is the nature of bear mkts. Mkt goes down in earnest again only when most bears have capitulated, and there are still hold outs and research on the street is mostly negative (eg MS Euro strategist, our global strategist) calling for the bear market to resume now that we've had a rally.
The China shares in particular could rally another 15-20% before this is all over (check out CAF).
US$ finally looks like it'll rally (responsible for hits commodity sell-off imo), probably sharply, should be supportive of US equities short term.
Gold/gold stocks have been telling you all this for a while now and I remain short, still looking for a May/June seasonal low.
Player #2:
note that optimism is already rising sharply. the AAII poll had a huge plunge in the bear percentage - the AAII bull/bear ratio is now the highest since the October 2007 top, odd lot purchases and odd lot short sales are back in extreme optimism territory, and money is flooding back into Rydex bull funds (the Rydex bears have curiously capitulated completely...the cumulative cash flow ratio and total assets are both close to a multi year low). 10-day m/a of equity put/call ratio still has room to move lower though, but that could be accomplished by a handful of up days (it's sure to fall again today). ISEE is sort of middle of the road (mild optimism) compared to past extremes. VIX is back in complacency territory, and speculative short positions in stock index futures have been covered - specs are now net long overall (all index futures combined). another noteworthy development: a huge speculative short position is being built in t-note and t-bond futures. since those tend to move inversely to stocks this is an early warning indicator.
in summary, the sentiment extremes that have created the low are now being quickly reversed - it won't take a lot more upside to bring them to the other extreme again.
Player #1:
agree though not for now, this bear mkt rally still has legs imo
Player #2:
the stock market at large is still ignoring these tidbits of distress, but i bet that the consumer-led recession will become a major market focus eventually.
Player #1:
check out Whirlpool and Electrolux. WHR -9% on 1Q falling 20% and company cutting back forecast. Electrolux -3.5% in sympathy.
Player #2:
well, it's really happening now...man overboard, namely the US consumer.
chugs, tj |
