Friday morning comments from Rick Ackerman
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The other thing….and it is probably more significant, is that there has developed a deep distrust amongst long term investors in precious metals. Especially the guys who got burned badly these past two years. If everyone uses such tight stops on GLD, their miners etc then it should theoretically be a cakewalk to take prices back down with some aggressive selling. With everyone a little on the paranoid side where gold volatility is concerned it should not be a surprise that a sharp reversal might quickly follow a high (I did not expect this sharp move so fast by the way). The other thing is that gold is being seen by many now as just a good way to make a quick buck. All the talk of manipulation aside the technicals do a damn good job of targetting the trend especially over the short term. The brilliance of it all is that there really is not another commodity, stock or investment alternative that has attracted so much attention and expertise so even fairly inexperienced guys can get a toehold and learn to turn a profit on the rises and falls. The internet is absolutley brimming with analysis on gold markets. It makes the gold ETF’s an ideal place to learn about trading because so many people will hold your hand along the way and and also because there are so many supportive groups to be found if you screw up!
🙂
Cheers Mark!!
For those of you that are not watching the Denver mining conference, lots of company presentations are at:
http://www.gowebcasting.com/conferences/2013/09/18/precious-metals-summit/day/2
and you can get to other days by clicking appropriately
I see several presentations that I am interested in. Thank you very much, CFS.
Here’s a tip. Do not go to full screen when watching these presentations. I am watching Mark O’Dea of True Gold Mining, and noticed that his visual aids don’t show on the video itself.
I put a limit order in to buy some RVREF, but did not get it.
Did get some silver Bull, though, and some Cayden, right at close a partial fill.
I had an order for RVREF (in my case TGM) myself and also was not filled today but got partial fills a few days ago. I have enough, but have decided to buy more with recent gains booked elsewhere. Since you’re trading on the “pink sheets,” a lack of liquidity can be an issue. I’ve used the pink sheets in the past and have found that when there’s excessive fear or greed, that low liquidity can work in your favor as some investors tend to hit what’s available, rather than waiting for a price that is in line with the stock’s real price action on the exchange. I have had very surprising complete fills that came out of nowhere and were out of line with the exchange action. If Monday is a little ugly, you might get a much better fill than you expect.
The stock market is due for a normal mild corrective move so nothing unusual there. I mentioned the other day that stocks would probably correct soon after the pop and that is what is happening.
The move in gold is not natural. It is day 2 of a new daily cycle, assuming this continues it means the top came on day one. I don’t believe there has ever been a time in history that a daily cycle topped on day one.
The kind of buying thrust and volume we saw on Wednesday would never get immediately reversed in a normal market and like I said I can’t recall ever seeing it for as far back as I have studied.
At this point I think one has to get out and stay out unless gold can move above $1417 and reverse the weekly swing.
I put in several low-ball offers for shares this morning, typically 2-3% below offer price and I have not picked up a single share yet.
Come on guys, sell me your shares….
September Song VII
This essay is chock full of good stuff, and I even have another horse racing analogy because I know some of you appreciate it…I urge you to read it because you might learn something.
I don’t just throw these in for fun or relive my past successes, but rather because they have direct bearing and application in today’s markets.
So forgive me if I get long in the tooth, but writing helps me to collect my thoughts, de clutter my mind and retrain my focus. It’s also good for the soul. I think you would all agree that has never been more important in these rapid fire, uncertain and erratic times.
Hearken unto my words…
“A tale of two horses”
The Kentucky Derby of 2003 brought together two horses, Empire Maker and Funny Cide.
Empire Maker was a regal horse, exuding class, with top notch breeding and big money backers from Saudi Arabia. He was born to be a champion.
Funny Cide was a NY bred gelding, whose future wasn’t as promising, from nondescript parents and a local horsemen who never had a big horse.
Empire Maker was the odds on favorite to win the Derby.
Before the Derby the two horses met in New York on April 12th, for their last prep race, the Wood Memorial.
THAT DAY, Empire Maker was 3/5 odds on favorite, and Funny Cide was sent off at 5-1. Funny Cide did take some money. What I call smart money.
Empire Maker won that race, beating Funny Cide by a hard fought neck.
Funny Cide had some trouble in the race and represented himself very well to be 2nd.
After the race the usual Monday morning quarterbacking began and the post race analysis.
The media, the racing reporters, were tripping all over themselves saying how easily Empire Maker had won the race. They stated so confidently Empire Maker was just toying with him, he could have won by a wider margin, he was saving his best race for Kentucky.
I looked at the race again and said to my father “Do you see what I see?”
I must have watched the race replay 10 times.
Empire Maker was life and death to hold off Funny Cide.
He had won by a very hard fought neck, and not for racing luck would have probably lost. In my mind the horses were very hard to separate.
But that’s not the way the media saw it.
For three weeks leading up to the Kentucky Derby the media had convinced everyone Empire Maker was the superior horse. They explained how he had won so easily, he was by far and away the best horse, and that he was a shoe in to win the Derby.
You heard this over and over for three weeks.
They literally had the power and ability TO CONVINCE PEOPLE NOT TO BELIEVE THEIR OWN EYES.
The day of the Kentucky Derby, as expected Empire Maker went off the favorite, and Funny Cide was forgotten, sent off at 13-1
THAT DAY belonged to Funny Cide.
Funny Cide confirmed his last race was no fluke, winning the Kentucky Derby easily at a long shots price of $26.
The smart money who bet him in his last race knew something. They were right. They were JUST EARLY.
Those who objectively looked at the race and were not dissuaded by the media were paid off handsomely. Those who fell for the medias bias failed. Plain and simple.
Needless to say I cashed a monster ticket that day.
Does all this sound familiar?
For weeks now we have been hearing from the media the FED IS GOING TO TAPER.
Like a broken record they played it over and over. How could you not fall for it?
I’ve said repeatedly Ben Bernanke never explicitly said he would taper.
It was data dependent. AND THE DATA DOESN’T SUPPORT IT!
The media swayed everyone again.
Just like the racing reporters who convinced so many not to believe their own eyes, the stock reporters convinced so many not to believe their own ears.
NOW THEY ARE AT IT AGAIN…
Let’s take a brief look at just some of the media blitz that came out post FOMC meeting…
Right on queue the FED’s Bullard came out and said the decision not to taper was a borderline call. A borderline call? Forgive Mr. Bullard but the voting was 11 to 1. How is this a borderline call. More damage control. More lies. More spin.
He then went on to say the FED could taper in October. What is miraculously going to change between now and October. More damage control. More lies. More spin.
The FED wants you to believe there is thoughtful debate going on and they are in control.
They want you to believe they erred on the side of caution and they still have an exit strategy. Nothing could be further from the truth. They only know how to do one thing: print.
Then the ingenuous Mr. Jim Rogers gets paraded out again to talk about gold.
Listen to the interview. One contradiction after the other. The headline says it all: “Jim Rogers forecasts a drop to $900”
Mr. Rogers said a drop to $900 is possible. Excuse me but anything is possible.
He then says if it goes to $900 he hopes he is smart enough to buy it.
Does this make sense to you? Does this seem sincere?
We are supposed to believe he is smart enough to make a call of gold going to $900 but not smart enough to buy it if it does? He then says there are no safe havens. WOW.
He then says in 5 to 10 years out gold could be well over $1900 .
But that is not the headline they choose to run with.
So what does Mr. Rogers know that we don’t know?
Then we have the “Oracle of Omaha” Mr. Buffet.
Mr. Buffet says the stock market is fairly valued.
If that is true then we still have a lot of room to run in the stock market.
Mr. Pisani, that guileless CNBC cheerleader, after hearing that gave the thumbs up to buy stocks. After all if Mr. Buffet, a value investor says the market is still fair valued, there must still be a lot of bargains out there. Go out and uncover them. BUY BUY BUY!
Then the last spin from Bloomberg News…
Physical demand has really slowed” after prices climbed, Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “There will be quantitative-easing tapering at some point.”
Excuse me but am I the only one who thinks this is an imbecilic statement?
So that is the criteria for gold? That is what is going to drive the gold price?
The assumption that at some undetermined time in the future, some undetermined amount will be tapered. No timeframe. No amount.
But when it comes this is gold negative.
Who writes this stuff?
If this isn’t the biggest piece of pure fantasy I don’t know what is.
Trillions of $ can be created out of thin air between now and “some point”, but when they finally taper this is gold negative.
This is the information the media is dispensing everyday.
It is nothing but lies, distortions, spin, and propaganda.
This is what you are up against. Everyday.
This is the battle.
The sad truth is the media is winning the battle.
This is the power the media has over everyone of us.
Whether it is telling you not to believe your owns eyes, and convincing you that one horse is far superior to another, or telling you not to believe your own intelligence and common sense and assuring you everything is wonderful.
The media is a monster and it must be fed.
Like the alien plant in “Little shop of horrors” it needs to be fed and it will eventually eat its master!
Too much information is not good.
You need to separate yourself, filter out all the noise and stick to your own convictions!
This has always been my anthem. When I went to the racetrack, before I walked in the gate, my mind was made up. I was confident in my conclusion. The only thing that would alter my decision was price. Value or lack of it.
I knew I would be surrounded with an onslaught of “experts”, amateurs, loonies who would be more than happy to share their opinion.
You must run from it!
The CNBC shills and cheerleaders are going to convince you now that the FED made a mistake, they should have tapered and we don’t need.
Thank you very much though, we’ll take the money and run up the stock market but we don’t need your money. LIES.
After the “shocker” of the no taper decision gold jumped up $60.
Many gold bulls popped the cork on the champagne bottles.
The reason being more printing of US$ should make gold more valuable.
In a normal world where the laws of economics still apply this would make sense.
BUT THIS IS NOT A NORMAL WORLD!
One blogger even said the road to $1500 is now a “hop, skip and a jump”
It is more like a push, pull and a fall.
Again in a normal world he would probably be right.
But I already learned my lesson and have curbed my enthusiasm.
On September 13th, 2012 the Federal Reserve announced “QE3”, an open ended bond buying program, otherwise known as QE to infinity.
On the news gold popped about $40 that day. The initial knee jerk reaction reasoning more money printing to infinity should be good for gold. The results have borne out the opposite.
Since then gold has done nothing except go down.
As I write this blog gold and silver are getting absolutely crushed.
It looks like a repeat of history.
This does not surprise me.
History doesn’t always repeat but it often plays the same tune.
And like my father taught me, look for the larceny, not the logic.
Now you have the same old “experts” scratching their heads, back peddling and doing flip flops.
First they like gold and dislike the conventional markets, now they flipped flopped.
Or they had their day in the sun and are now screaming manipulation. Their in, their out. They have no idea where they are.
So where are we now? Really.
The debt limit fight is right around the corner. The defunding of Obama Care.
The German elections are coming up.
I personally don’t know if any of these things will have an effect on gold
It looks like Boehner might have finally grown a back bone, and now that he knows he has cover, he might take the fight on Obama Care defunding.
This could be gold negative.
For stocks bad news is good news. For gold any news is bad news. For gold good news is really really bad news.
Then again the debt limit debate might blow up.
This could go either way for gold.
Scared investors might run to the dollar again, for right or wrong.
And whatever happened to Syria?
What did they fall off the map?
What I am saying is there are too many unknowns, too many land mines.
You could be shanghaied, hijacked, kidnapped or blown up at any time!
Sometimes you just need to get off the field. Especially if the field isn’t level.
You can dig your heels in and say gold must follow some recipe for rising prices.
But it doesn’t work that way.
Speculating never works that way.
You can hold on to it for insurance, whatever the heck that means, and delude yourself.
But remember what Mr. Rogers, that bastion of truth and honesty said, “there are no safe havens”
Proceed at your own risk is all I can say.
You can follow the CNBC siren call to buy, buy buy!
Stocks might continue to go to heaven.
Bernanke might have just telegraphed again “I have your back”
With wind in it sails stocks could be ready to soar.
Bernanke cleared the runway, pedal to the medal!
BUYER BEWARE!
Or you could buy the new iPhone, lock yourself in your room with the new Grand Theft Auto and watch the fireworks.
I don’t have a clue.
Now I want to come full circle and finish where I started.
Prior to his Kentucky Derby win Funny Cide always played second fiddle.
He was disrespected, mocked, scoffed at.
He was a NY Bred Gelding. He wasn’t a Kentucky blue blood.
No self respecting horseman would want anything to do with him.
But his trainer Barclay Tagg, a true horseman, believed in him.
Tagg stuck to his guns and brought the horse to Kentucky to face his nemesis one more time.
Dismissed at 13 to 1 by the deluded public, who were brainwashed by all the so called racing “experts”, they didn’t want to touch the horse. Like his name he was just a laugh to the public. “A NY BRED GELDING IN THE KENTUCKY DERBY, HOW FUNNY IS THAT?”
The public, the amateurs, the novices had a good laugh at Barclay Taggs and Funny Cides expense.
It wasn’t a laughing matter though when Funny Cide turned the tables and won the race paying $26, except for those WHO BELIEVED THEIR OWN EYES AND DIDNT GET
PERSUADED BY THE MEDIA!
I trusted my eyes and cashed a huge ticket.
See I knew Funny Cide might or might not have been the better horse, but I knew, ON THAT DAY, he was the better bet.
So like Funny Cide who played second fiddle to Empire Maker, I believe gold is playing second fiddle to stocks. Eventually though gold can turn the tables. When I have no idea.
Funny Cide went on to win the 2nd race in the Triple Crown, the Preakness Stakes.
But while Funny Cide was winning that race, Empire Maker’s trainer, Bobby Frankel, decided to GIVE HIS HORSE A REST. HE HAD A GAME PLAN AND A BIGGER GOAL.
Now here is the kicker. The truth of the matter was Empire Maker was the better horse.
The two rivals met again in N.Y. for the Belmont Stakes, the longest, hardest and most demanding of all the races.
Wouldn’t you know it the crazy public was now high on Funny Cide.
As usual they missed the wedding and showed up at the funeral.
After winning two big races and using most of his energy Funny Cide came up empty THAT DAY.
That day, Empire Maker, well rested, exerted his authority and won easily. After all he was a Kentucky blue blood with the breeding. His breeding was superior.
When the REAL RUNNING began Empire Maker proved his class and drew off.
He was just waiting for HIS DAY to rise to the top.
After all the cream always rises to the top.
And so it might be that way with gold.
Right now gold is playing second fiddle to stocks, but there is COMING A DAY when the better asset might turn the tables.
So like Empire Maker, on the RIGHT DAY, when the REAL RUNNING starts gold just might exert its superiority and BREEDING and draw off..
Somebody’s gonna bundle all these stories together and call it “The Songs of James” 🙂
Let’s just hope the epilogue to the book doesn’t read something like this:
“People come into the world with nothing. And when they die, they leave with nothing. They might work hard to get things, but they cannot take anything with them when they die.
“It is very sad that people leave the world just as they came. So what does a person gain from “trying to catch the wind”?
They only get days that are filled with sadness and sorrow. In the end, they are troubled, sick, and angry.
“And so I came to my senses; in September 2013 as the price of gold appeared to be going nowhere I sold all I had, thinking to free myself from this wind-catching. Only too late did I realise that precious metals are always “precious”, and the price others place on it is meaningless.”
oh .. by the way;
most of that is not my original writing.
Have just read this a few days late James. Sounds like you’re onto a good hunch. What was your word for it in an earlier blog – ridiculous!! A
Cool. That was the longest post ever on this site I think!
James, it was your best! I loved the whole damn thing. Every last word.
Nice work….great story……and you will probably be right. Maybe hold that gold at 1500 buddy.
Mr. Greater, you are going to write a dissertation of that nature that clearly came from a mind of focus and determination and sell gold if it does not hit $1,500 by Septembers end! You, my friend, and I say this with respect, are as crazy as MSM folks, etc., you correctly criticize. I would equate actions like this to a marathon runner who simply quits with 1/2 mile left. I mean no disrespect.
Perhaps gold and gold stocks are suffering from massive debt deflation. The Fed money creation is being overwhelmed by growth in debt.
Expect lower gold and gold stock prices.
For those of us who have massive (accounting) losses both on bullion and mining stocks … we’ll just have to wait for the head to head race to end. Getting back to even is going to take one hell of a move up. I could have used the money to remodel my kitchen instead of chasing a golden sombrero … but, heck, I can live without a new microwave while I wait to get back to even. It was a risk. I ain’t complaining. Just VERY happy I kept some prudent money in safer bets in case the toilet breaks … as for gold and gold stocks … sometimes I feel like breaking the toilet on purpose (’cause I know it’ll choke on Silver Eagles). The last few years have been like owning my boat. I burn gallons of unleaded per hour, but, damn … what a really fine ride … even if we are betting on a horse name “Tripod” (radio ad for Midas Automotive!)!
By the way … sitting on a 20K paper loss on Barrick … I did sense, after reading the article in “Globe” (courtesy Big Al’s website) there is a glimmer of hope Tripod, the horse, will make a stretch run to end all runs. In the mean time .. it’s boats afloat and unleaded to burn:-)
Even the best stock pickers make bad decisions once in a while, Douglas.
What makes things really hard is when manipulation makes prices go against fundamentals and all logic. Compound this with regulators that turn a blind eye on some banks that break the rules flagrantly. It does not feel fair. But he who laughs last, laughs best. Hang in there.
Just thinking that guys are selling positions that they had not bailed out of during the recent high point. Plenty were waiting for gold to rise high enough to reduce losses and give an escape route….others had recently just bought back in. They had that “Oh Damn” moment when gold started dropping again in late August and were not going to give it a second chance and let a selling opportunity escape them again.