IT’S QE OR ELSE

                              The Bernank: Man Of The Moment

Next week, the world literally turns its lonely eyes to the Mariner Eccles building for more “Hope & Change”.

“Ohhhhhhhh, Chalky Soetero is giving his umpteenth campaign speech?”

“Errrrrr, not quite.”

The world is hoping, praying really, that Weimar Ben opens the money printing monetary easing floodgates at the June Fed meeting. As with all things, the devil is in the details, and even if he comes through, the key will be if it was enough. Hide the kids if he does nothing.

The monkey wrench in the equation is Greece; with a newly elected socialist government only a couple of days old, and ready to tell the banksters in Brussels to go pound sand, how much of the taxpayers money does Ben give away?

Not to worry, Vampire Squid [GS] will let the moneycrats know what to deliver early next week before the meeting. The real question is which Belgian or French caterer is doing lunch. Remember, “The private sector is doing fine.”

Gold especially is subject to the “buy the rumor sell the fact” mantra of Trading 101. How many times have I warned [and been right by the way] that the rock gets rolled up the proverbial hill, only to be rolled back down when the Central Planners sense the public is now just a tad long the yellow stuff?

And on cue today, the EURUSD put on a blistering short covering rally because of course too many people are short the pair. Forget the disappointing retail sales figures; it’s all about QE and the “Hope” the Fed bails out Europe and saves the day; the “Change” of course is that something but failure will be the result. Now that’s what I call “Hope & Change” trader style.

Too bad it won’t change anything because Italy is next; say goodnight Europe, the party is over in 3 …. 2 ….. 1

Have a good day everyone.

-vegas

LET THERE BE LIGHT

                                       A Moment Of Clarity

Perceptions are everything; reality is nothing. The former is fluid; the latter is fixed.

Today, we know 2 things we didn’t know yesterday. The first is that Public Sector Unions are toast [thank you people of Wisconsin]. It was an impressive victory [about 8 points] for Scott Walker, the incumbent Republican Governor, and a total rebuke of spend, spend, and spend some more [of your money] union thugs.

Take away union vote rigging in libtard nation Madison, and decaying corrupt Milwaukee, and the margin of victory probably really was on the order of double digits.

A world away some hours later we get the Vampire Squid Alumni, Mario the Great, holding his usual ECB presser after the ECB formally met to discuss monetary policy for the Eurozone. Like Greenspan, and all true great economists, he said nothing better than just about anybody normal.

“Spin it all you want Mario, you have no clue what to do to get Europe out of its mess.”

Which brings me to gold: it’s now $100 off the lows on the heroin hopes of QE3 on June 20 from our buddy Weimar Ben. Anybody but me ever hear of the adage buy the rumor sell the fact?

From a trading standpoint, who isn’t already long gold looking for a pop up if we get the anticipated money printing easing? The Fed’s street mouth piece, J. Hilsenrath over at the WSJ [Wall Street Journal] confirmed it yesterday. This guy leaks more info from the Fed than “Deep Throat” ever did on Nixon back in the 70’s. So, when it comes, who’s gonna be there to buy it from you at a higher price?

And what if we don’t get it? Pleeeeeeze, don’t write me with what happened to your “protective” sell stop.

And what if that election in Dairyland is the start of something bigger come fall? With Chalky Soetero gone and a true Republican House and Senate, can and would the Amerikan economy be unleashed for growth and maybe a balanced budget? I dunno, we’ll see.

What I do know is this: gold is not a one-way street. Jumping back in the vegas hot tub time machine once again, I take you back to this exact moment on the calendar 32 years ago. Gold has come off its historic highs in January of $850 / oz.; pessimism is high, Carter looks like a shoe-in for re-election, and then gold bugs are talking about price levels for gold that make people’s eyes glaze over, and budget deficits are huge and growing.

Then, an interesting thing happened; Reagan was elected and set off the 80’s boom and gold went into a 20+ year bear market that saw prices back at the $250 / oz. level.

Funny thing about history; it tends to repeat itself.

Have a good day everyone.

-vegas

NFP UGLY

                                    Hey, Let’s Trade Some Gold

In an economy only Chalky Soetero could love, even the BLS [Bureau of Lies & Statistics] couldn’t make up enough births, new business start ups, and people dropping out of the workforce to give the needed spin on today’s job numbers.

But hey, running the economy into the ground is hard work when you have fundraisers scheduled day in and day out. You have any idea how hard it is to party with the Hollywood types all week and then have to come home to MOOOOOchelle and be lectured about eating broccoli instead of cheeseburgers?

Back in the real world, gold took off today on hopes Weimar Ben has enough bad data in his quiver to justify full throttle hyper inflation full speed ahead into QE3 [and then QE4, QE5, ad infinitum nauseum] later this month at the scheduled Fed June meeting. 

So, just another $70+ range day. Ho hum.

My only hope for those that are long gold is that they get their collective wishes, because if Uncle Ben disappoints, well … I don’t want to go there because there might be kids around reading this and I don’t want to scare them. But at least for today, it looks like gold has bottomed for a while, and the $25 gap up on the NFP news filled some shorts at prices that left some stuff in their shorts [if ya know what I mean].

Not to be outdone, with record short spec positions in EURUSD, first let’s open the hatch door down, freeze the quote and order tickets for 30 seconds, then light the fuse to take us up almost 170 pips. That dealers intentionally freeze the order boxes even once in your lifetime should be cause enough to have them all taken out back of the woodshed and shot; not in the head because that would be quick. No, everywhere else.

Meanwhile …. In news you can really use.

                                    Which Adults Are Peeing?

It’s gonna get warm this weekend, and in the interest of making sure my readers are well informed and safe, you need to know that according to a recent poll conducted by the “Water Quality & Health Council”, fully 20% of adults admit to peeing in public pools.

“So, who’s up for hiking in the mountains?”

And because it’s gonna get hot out there this summer, remember: Amerika is known for its ingenuity.

Have a good weekend everyone.

-vegas

WHEN GOOD NEWS IS TERRIBLE

                                         Take Notice Markets

All it took was a fantasy land slightly better housing number and you could here the QE3 air come out of the market balloon. Perceptions are everything; that and the fact Europe becomes more desperate and broken every day.

Catching a falling knife is always difficult and most retail specs can expect very bloody fingers for their efforts; the action below 1545 in gold was just brutal in terms of price change. So, here we are at the 1530 -1540 area as I write; remember 1599 Mrs. Watanabe? You know, rock up the hill, buy the dip sell the rip? I’m wondering where the remaining longs have their collective stops: 1520, 1500 maybe?

Any day the market is open seems like a good day to sell EURUSD. The root of the problem in Europe is that every politician over there has squandered their collective credibility over the last year and a half by bold-faced lying about the problem.

In a nutshell: when you loan money to deadbeats, don’t expect it back – EVER!

“I give you extra 1% - how that sound German swine?”

“Sure, here’s another €5 billion Euro’s.”

Every day they send out somebody to boldly lie where no man has gone before. How many times have one of them said everything is OK? If I had a nickel each time over the last 18 months, I could give the money to Greece and the problem would be solved!

Really, the whole point in having the Euro slime talk is to buy time and start short covering rallies that the big money can sell. With record shorts in the EURUSD [about 22 billion notational] all it takes is a small spark anywhere near the close and we start rallying like a dry Christmas tree on fire.

It will be interesting to see if gold can hold 1500. If it can’t I think it’s going to be an ugly, ugly affair going forward. I’m just going to throw this idea out there for you perma-bulls in gold to ponder. What if the gold market is factoring in a Romney win over Chalky Soetero and both houses of Congress are Republican? What if they slash taxes, let loose the energy industry, and balance the budget? Up until now, gold has been up 11 straight years; if that scenario plays out gold ain’t gonna be anywhere near 1500.

Have a good day everyone.

-vegas

MICROSECOND TRADING: TUESDAY EDITION

                                         Out In Force Today

Another day where the Central Planners were out in force in the gold market. Not content to gobsmack it down $20 in Asia and early Europe, the rock got rolled back up the hill for another move down.

The problem with piggy-backing them is that they care not about profits/losses; they only care about getting the price down. If they are $10 or $20 [or even more] early they don’t care; you and I should.

Since last week you have to be blind and/or stupid not to be able to see them in the market above 1580. It slowly climbs and then BOOOOOOM! Down $2 or more in a second or two; climb again rinse and repeat. Cover under 1580 and start fresh again.

“Errr, we only represent customers and do no proprietary trading”

“Yea, sure; by the way is my check in the mail?”

Gold continues to be plagued by extremely sharp moves both up and down in a fraction of a second. You get yourself on the wrong side of one of these, and it isn’t a very easy task to then try and make it back. What goes out of your pocket in a heartbeat might take many hours or even days to get back, and that’s if you are lucky.

This is what I call a lack of “trader volatility”; multiple trend moves within the same day in the same direction. Without it you have almost no chance of making losses back during the day if you get on the wrong side of a trade. What we get now are micro-bursts; gold pops up $5 in 3 seconds, spends the next 3 hours going up $2, and then drops $6 in 10 minutes. Very tough trading scenario.

Still, I think what will drive the market until the next Fed meeting [and Greek elections] will be one of perceptions about QE3; will they or won’t they? Thing is, this is about there last chance to do anything before the election and make it count [if it works, which is a big if]. So, the market is particularly interested to see what Weimar Ben has up his sleeve.

Any thoughts the Cntrl-P button isn’t pushed and it won’t be a pretty picture for gold.

Have a good day everyone.

-vegas

ROLL ROCK UP HILL REDUX

                                       Attention Gold Buyers

I’ve had this nightmare dream before; I’m driving along and everything’s fine and then out-of-the-blue the rocks come falling down crushing my car and me inside. You wake up and realize it ain’t happenin’, but nonetheless for a few seconds it’s a little disturbing.

How many times have we seen this scenario: sharp rally, crush shorts, turn common tech indicators bullish, get public long [again] at or near the top within 100 hours?

As the world falls apart and specifically Europe implodes, the smartest people in the room have just bet, in the last 48 hours, that Weimar Ben will hit the Cntrl-P button over at the Mariner Eccles building and start QE3 in June. If we don’t get it, a whole lot of people are gonna be trapped inside my dream.

I’m going to go out on the proverbial prediction limb here.

I think we have seen the low in gold up and until the Fed meeting in June. I can see about 1550-1557 on the low side and maybe 1610-1625 on the upside until then. But here’s the rub; if we don’t get QE3 from the Fed in June, and 1530 -1525 subsequently gets taken out, we are headed for a major debacle in price on the downside. And with that comes many months of price congestion and basing before gold can ever hope to go higher.

Around the 1580 level and higher today I have seen the “nibble nibble BOOM!!” phenomena from the Central Planners. There’s no doubt in my mind they were heavy handed in the market today. What do you suppose that means?

While the entire world goes ga-ga over the FaceBook IPO today [expecially California State Tax Apparatchiks], Greece is toast, Spain implodes, and European GDP is falling rapidly. Granted we needed some kind of rally because so many people have piled into the short side of gold.

[Here’s a thought; what if FaceBook opens higher and closes lower? What happens then?]

But remember this: in a bear market [not just gold but any market] the rallies are killer – they come out of nowhere and they are vicious – and they convince a whole lot of traders that the trend has just changed and now we can pile into the long side of the trade. If you look at a daily chart of gold this is the type of action we have seen since 1800.

Ultimately, after the stupid money has piled into the wrong side, price rolls over and we get the rinse & repeat cycle we have seen ad infinitum nauseum  since last Fall; buy the rally get stopped out [pick number of days here ___ ] later.

You can rationalize a lot of things, but you can’t ignore the math; Europe is complete toast and the U.S. [add Japan too] is next. Stocks are so overvalued, pumped up via the Fed to get Chalky Soetero reelected, and give the illusion that things are just fine.

We have started to see stocks roll over world-wide; practically every major stock index is lower on the year. When the complete “risk off” comes, just remember gold isn’t immune.

Meanwhile … Chuckle of the day before the weekend.

Have a good weekend everyone.

-vegas

Update 3:15PM Chicago Time

In case you were wondering why I have Friday rules, I present EURUSD as prima facie evidence of what the Central Planners can do when conditions are thin and stops are on the plate. At 2:00 P.M. we had a melt up stop hunt in the EURUSD of about 60 pips within a few minutes on zero news.

Whatever can make your weekend can destroy your weekend. I wonder how many Euro traders are crying in beer as I write; only it won’t just last a few minutes, it will be there all weekend into the open on Sunday night. Been there done that once in 1980; ain’t ever happened since.

Sometimes it may seem to those who are new to trading and creating wealth that my methods can be restrictive and that I may miss some profit opportunities for no apparent reason. Lesson #1; first do no harm, then make money. I rest my case.

The Dow 30 closed near the lows of the day as FaceBook closed at $38. Another pump and dump scam Ma & Pa Kettle will eventually lose money.

Over the weekend [probably Sunday] I’ll have a special post. Tune in for details.