Hard to V-Shape Without The Bearded Clam

Everyone wants to “V-Shape” up, after yesterday’s carnage. More specifically, buyers of gold and silver miners want a sharp snap back rally to allay the pangs of misery that have been inflicted upon them.

As you can see, early on, sellers are controlling the tape. Mind you, these aren’t short sellers, but people who’ve been zeroed out, forced to liquidate their accounts.

Post disaster, you can expect this sort of relentless selling pressure to persist, until the last weak hand lets go.

If you are long miners, refrain from averaging down. I suspect you will get cheaper prices.

As for the market, it might trade up a little. But to be frank, this isn’t the season for cocaine gorilla runs. Without a catalyst, we can drift lower until the market demands even MOAR stimulus.

In the big scheme of things, the market needed a little give back. Let’s hope and pray that the give back doesn’t metastasize into something debilitating.

Today was a unique day for the markets.

Today’s Overall Hybrid score in The PPT closed under 2.50 for the first time since May of 2012. More than that, breadth closed at an atrocious 6.98%– the 11th lowest breadth number in PPT history (2008). Although we are not Oversold on a historical basis, we are oversold on the 3,6 and 12 month algos, truly a rare occasion.

As you can see, the track record is near flawless for this signal, over 9 previous occasions.

Today’s rout in the markets has confirmed the Hybrid Overbought signals that were flagged last week.

Now what?

Construction ETFs are flagging very reliable OS signals and silver/gold are showing record levels of stress. Both signals are highly accurate, especially a historically high score for ZSL, which comes with 18 out of 21 down periods and an average loss of 11%– after the signal is registered.

Enough of what the fortune cookie people are saying on the teevee and internet. The market, as a whole, especially commodity stocks, is deeply oversold.

Over 640 stocks were considered to be oversold today. I can firmly say the market will bounce soon and hard. Those who are shorting now for profit are late. However, if you are shorting to hedge, I support that position.

The stocks that have underperformed most will bounce the hardest. I will provide a short buy list tomorrow, as I suspect the market will open lower.

As a composite, raw commodities are now trading at late 2009 levels, essentially erasing the entire move up since 2010. This is a significant development that marks the end of the commodity bull run. Jim Rogers is playing with his bowed ties right now, not his money.

The Commodity Index inside The PPT is at its lowest point ever, at $82. It hit a high of $147 in April of 2011. So much for long term investing.

The precious metal trade is fairly straight forward at this juncture. It’s either going to fall back in line and respect previous levels of stress, or it’s going to behave like a hedge fund filled with gold bullion just blew up. As of now, consensus supports the latter. However, keep in mind how fast fear can transform into greed and prepare for that eventuality.

I am going to leave this post open all night, covering the Boston terrorist event. I’m not gonna get melancholy or irrationally angry about this event. We live in a violent world, where people want to kill one another, based upon any number of reasons.

At this stage, we can only hope this is an isolated event, although there are reports that there is smoke billowing from the JFK library. If this is an orchestrated attack, expect more volatility and higher gold/silver prices.

Live Twitter Feed

Drudge Report

UPDATE: Reports that two more bombs have been found near marathon and a suspicious package at train station near Harvard.

AG, FRO and GTAT annihilated me today. Last I checked, losses mounted above the classic 5% comedy threshold, causing me to shut off my monitor with a punch to its stupid computer face. After “work,” I am sure Mrs. Fly wants to mosey on down to Fortunoff to spend 10k on patio furniture, all the while the acid in my stomach eats away at my organs.

Kidney failure is in my future, caused solely by stress. No need to worry about that, since I have zero issues with snatching someone’s kidney and leaving him in a bathtub filled with ice.

Do you want another prediction? How about this one: the market is gonna bounce tomorrow and I will make back the majority of my shame.

That’s the Pollyanna view point.

The reality is, this is my Normandy and I am a panzer tank operator, hoping to run over a few americans with my treads. I see the stupid americans and their boats and fire at them with my cannons. They’ll never make it past the beach. Us Germans are cool as hell and our leader is a military genius.

I don’t even know why GTAT is down so much. I was prepared for AG, but not GTAT. Do these idiots have gold in their silicon? What the hell is going on here?

The whole planet is stupid and I hope the sun bakes it and we finally morph into venus, 900 degree weather accompanied by zero forms of life.

Merry Christmas, jackass.

UPDATE: A terrorist event in Boston? My day has now been reduced to trivial. My concerns are with the people affected by yet another tragedy.

http://www.youtube.com/watch?v=HUCr-c11dDM

You can’t say I didn’t warn you about this day. I’ve been saying the market was going to “fall into a never-ending catatonic state of oblivion” once tax receipts were collected and earmarked for future expense. I need to be very frank (no hotdog) with you and display my regret on this open canvas.

Knowing what I knew and did what I done, I feel a sudden urge to punch my windows out, commit atrocious acts of unsolicited violence. Granted, I am not a very brawny guy, more on the thin side, although I’ve been adding pounds to the torso as of late. But I was thrown to the wolves as a young child, taught to punch others in the face at the age of 5, practiced the art of sudden knife lunges as a teenager, dodger of bullets as well. My bones are calcified and can break jaws into a million pieces.

So here I am, at the top of my game, triumphant in my predictions and all I have to show for it is an intra-day loss of 4%. Something is wrong with the way my brain coalesces with the rest of my body. Why did I, FOR THE LOVE OF DEAD DOGS AND STEAM FRIED CATS, have to buy AG?

There are parables that need to be read tonight, stories that will scare me straight, steer me away from greed.

Without discipline, there is chaos. Right now, there is anarchy at The House of Fly, papers strewn all over the floor, people crying out loud, arguments to be had. Fights will happen and people will get hurt. This is the result of disobedience, sneering and mocking at the prophecies that were granted to you from superior beings, immortals, the old gods. My fate is frowned upon like the people who make holes in donuts or hedge against inflation.

“Janitor needed in aisle 13.” Time to get my mop and clean up this mess.

I call this one “This Time is Different”

Sale location: Sotheby’s
Starting Bid: $150 billion

I write that title for different asset classes, once per week. Last week it was bitcoin, today gold. Next week, God willing, I will write “THE GREAT DOW JONES CRASH OF 2013.”

Life is good, except for heavy buyers of gold bars. Those bozos are getting punched in the face and penis repeatedly.

Let me preface my belligerent mocking with a side note. AG is my largest position right now, oddly enough. I’ve said it was heading for new 52 week lows. I even provided you with a list of metal stocks that were easy short, gunning for 52 week lows.

Lo and behold, as fate always has it, “The Fly” is caught in the middle of a maelstrom, competing with degenerates and malcontents for egregiously sized capital losses. Thus far, for the day, I am down by 4.5%!

Good to get that tidbit out of the way. It’s time to get back to mocking all of the retards (myself) who are long gold.

Seriously, you Ron Pauls out there make me want to vomit myself. Why would you take possession of gold bars and place them in vaults? As sure as I am writing this, some pleb sold his bitcoins at $65 and transferred the proceeds into gold for ‘safe haven’. The market is taking a wrecking ball to the Tea Party and anyone that bets against the Federal Reserve.

Today is a great assault on all of the conservative talk show advertisers and their gullible listeners. It’s the great silencer for Peter Schiff and others of his “ilk.”

SILENCE, as the laws of depravity take hold of the precious metal cabal, effectively leaving them in ruins.

Repeat after me.

“The dollar is the only safe haven.
Gold is NOT money.”

I expect the liquidation in the commodity space to spill into the general market soon. We are doomed for a 10% move lower, now that taxes are done.

The sector has been screaming bloody murder for the better half of 1 year, constantly underperforming the general indices. Whoever is focused on metals/mining should be getting margin call’d out today, if not tomorrow. I didn’t think there would be another rout in gold today, but it happened.

As a result, I expect this move will exaggerate to the downside, picking up steam towards the end of the day. If you bought on Friday, refrain from averaging down here. I will wait to buy once more, then sell on a lucky bounce.

The downside to the metals is significant, considering where they’ve come from. It appears the core holders have lost faith, which has resulted in this damage.

Bottom line: Raise cash and hedge. We’re going lower.

Everyone is confused about the sell off in precious metals. Well, put your blue blazers on and let me tell you why it’s dropping.

Gold and silver are retarded and the people who store it in their vaults, moronic. Think about it for more than 10 seconds and I’m sure you’ll agree with me.

But that doesn’t mean we can’t make some money off the blood and tears of others. Every trader worth his salt will be looking for a precious metal reversal today. But it will be a very quick trade, since the space is in liquidation mode.

While in liquidation mode, stocks/commodities can exaggerate to the downside. Think about the people who have physical gold/silver stored in a god damned warehouse in brooklyn and feel sorry for them. What the hell are you gonna do with those gold bars now?

So many central bank haters are getting their faces punched in today. All of the gurus who warned of Zimbabwe-esque inflation have been dispatched with egged faces. There isn’t any inflation worth worrying about. Therefore, as I alluded to in the beginning of this article, gold, silver is retarded.

Nonetheless, I like the miners here for a bounce. This trade expires on Thursday.

Stock market bulls, “champions on the internets”: prepare for a hideous pullback in all indices. Let the slide in precious metals be your crystal ball. This is not an isolated event. We are about to undergo a liquidation in the commodity sector, both gold and silver will liquidate a little more than others.

Yes, it’s true, I am long a lot of AG going into a god damned meatgrinder tomorrow. Am I happy about that?

Yes, I am absolutely riveted by the trading in silver this evening, watching it get its nuts beaten out of it. I’ve also been in New York these last few days, attending to parties and family events–chauffeuring the family back and forth–attending to their whims.

As soon as the market opens tomorrow I will be greeted with “TOTAL MASSACRE” in my silver position, as well as my other small crappers, hedged by cash (which is only 25%) and my HDGE position, which is almost 20% of my book.

I expect to undergo losses and will figure out how to proceed as the day progresses. The knee-jerk thing to do will be to sell AG and chalk it up as a “stupid idea.” But I’m not so sure the miners will drop as much as silver is this evening. You might just get a mean reversion trade, with investors betting on a capitulatory bottom.

We all know this is wishful thinking. The God damned bottom is gonna drop out of the miners tomorrow and I will get to enjoy its splendour in full bloom.