Just remember, all this bullcrap you are seeing today is about the dollar and it’s relationship with the rest of the world economy. If it rallies hard here, it’s because the banks are throwing a scare into the Deflation-minded. But if you have any questions about where the Fed is willing to go, please hit yourself on the head with a ball-peen hammer for “clarity’s sake” and consult this worthy chart once again (hat tip to DPeezy and ZH for posting yesterday).
If you are really confused, I would get thee to The PPT for a quick infusion of “brain trust.” The wins in those fora lately have been breathtaking. It just gets better every time I go in there.
Back to the dollar rally — which I’m just not sure is for real, frankly. In fact, it strikes me as more “seasonally oriented” than anything else. You know — “September sucks, sell, sell?” My opinion? That bit of conventional wisdom and a box of Cracker Jacks will keep the monkeys at the Zoo from self-pleasuring, but it will get you little else in this Fed-governed market. No, the Fed’s first job is to keep the banks liquid, credit spreads tight, and the FDIC afloat. If you think they won’t sacrifice the dollar to those ends, then please repair back to the chart above for further ball peening.
Granted we are at a critical juncture, as you can see from the chart below. We are right up against a long term down trend line (at about $23.45) on the [[UUP]] . After that we have the near term 38.2% (strong) fib line at $23.57 and the 50 day EMA at $23.60. I would tend think we have officially “bottomed” in the dollar for the near term if these prices are breached on volume.
Both the prices of gold and silver are holding up here as well, which gives me some indication that if money is flowing back to the dollar, it’s not at the expense of the precious metals. This should offer us some opportunity in our miners going forward, and even today. The [[HUI]] is bouncing off it’s trendline as we speak. Happy hunting.
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Late day sell off in the UUP brought us to $23.41 on the close, with a couple of red ugly 5-minute candles in the last ten minutes.
Too early to tell if that resistance held, however, as UUP has a habit of gapping in the morning, as a response to the overnight currency markets. I take cautious hope in this close, and the strength of the PM’s here, though.
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Jake, take a look at the OTM December and March Calls in SLW. Someone is either accumulating a bunch (or selling them!)
Sheezit, over 2500 call in the December freaking 15’s today alone? And NO WAY someone is selling that to collect 15 to 20 pennies per contract… the risk reward is too forebidding at this time of year.
Vedddddyyyyyy interesting.
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another great post, jake.
Thanks, Mon.
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress in 1933. It is the primary federal regulator of state-chartered banks that are not members of the Federal Reserve System.
Ben has said he doesn’t give a fuck and a mallowcup about the dollar, in so many words.
Erm, yeah, that was my point.
Just to clarify — my point about “keeping the FDIC afloat” was somewhat ancillary to keeping the banks afloat. IOW, the only thing that is keeping any confidence in the banking system at this point (and thereby averting panic) is the somewhat specious “reserves” of the FDIC, which Ben would prefer not to hit up.
To that end, he’ll knife the dollar in order to spare the further FDIC dippage.
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The Fed is already using the banks’ excess reserves to purchase MBS, agency debt, and T-bills, yo.
Good thing they got plenty of fresh ink and paper in the basement, yo.
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The FDIC presently possesses roughly $32 BN with a ‘line from Treasury of $50 BN’ insuring $6 “T” + in deposits.
Think they’re running a bit ‘short’ in coverage,,,no?
The Nation is Broke. BK’d.
Zimbabwe’d!
Oh what to do.
Fuck paper and ink, man. They have paypal-esque digital accounts to make it rain. It’s the green way to expand money supply.
There’s a pretty interesting interview(s) of NY Fed Chief Dudley over on the most respectable financial news source website that provides some insight into NY Fed ops.
http://www.cnbc.com/id/32626353/site/14081545
Is Dudley the union thug? I nearly blew my toop when I heard that shit. The extent to which this Adminstration is attempting to take the country hard Left is literally mind boggling.
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No, watched it, and that’s not the guy.
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My favorite part is in the first video when Dudley says, “My view is that we have tools to manage our balance sheet so that we are not going to have an inflation outcome (very short pause) bad inflation outcome.” I think his conscious decision to quickly correct himself is all of the evidence you need that their goal is to inflate like a 10 year old with a new pair of Air Jordan Pumps. Tssss, tssss, tssss, tssss….
It’s BernaNke, btw.
Fixed, grazie.
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Another reason to pull your kid out of public (indoctrination) school.
Respec’ mah authoritah!
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You can still teach your children to think, even if they are in public school. I didn’t realize we were all a bunch of serfs until I was well into adulthood. Grew up in the military where the President is always honored, no matter what you might really think.
My daughter is quite the opposite. She has told me on more than one occasion “be a rebel, Mom”. The internet, with many people speaking their minds and sharing differing opinions, has been good in that way.
Not going to be quite as easy to get a good crop of serfs going as it used to be.
Military must honor the President, unless he goes against the Constitution, like down in Honduras.
Of course, Obama supported the Constitution breaking Prez on that escapade too. Odd, no?
Or no?
Aside: Our commie Congressman finally got the balls up to have a town hall meeting on this health care question today. Of course, he’s having it in the worst neighborhood in the district, otherwise known as “friendly territory.” I think he’s going to be quite surprised by the turnout, however.
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Obama is confusing, to be sure. At least with Bush, I knew I hated his guts.
Confusing may be worse.
Read Orwell’s Animal Farm to clear up any lasting illusions.
Or, if you can find a copy in print, Saul Alinsky’s Rules for Radicals.
So far, we are “textbook.” This latest “Dear Leader Speech to the (Captive audience) Chillens” is par for the course.
Incredible in America, frankly.
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One hatchet down… Hit the bricks, Van
i feel we get a bullshit dollar rally soon…a rally is a rally…and it will offer great buys in gold 875 range and silver..perhaps the result of an extraneous event…chart says dollar rally.
Not yet it doedn’t (sic).
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not measuring UUP in hours Jakester…a month from now would be a good time for review…
A month from now is a lot of money away.
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true..question mate..your favoritie junior gold -(i own some ngd)..thanks
From the esteemed Walter E. Williams: We can thank public education for American gullibility.
”
“At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That’s nine times Congress’ prediction. Today’s Medicare tab comes to $420 billion with no signs of leveling off. How much confidence can we have in any cost estimates by the White House or Congress?”
…
“The proposed tax increases that the White House and Congress are proposing will probably pass. According to the Washington, D.C.-based Tax Foundation, during 2006, roughly 43.4 million tax returns, representing 91 million individuals, had no federal tax liability. That’s out of a total of 136 million federal tax returns. Adding to this figure are 15 million households and individuals who file no tax return at all. Roughly 121 million Americans — or 41 percent of the U.S. population — are completely outside the federal income tax system. These people represent a natural constituency for big-spending politicians. Since they have no federal income tax obligation, what do they care about higher taxes or tax cuts? ”
…
You and gold is the man, Jake. Good patient call and great post.
I love it when the PM’s rock ‘n roll.
Everything seems to make sense when that happens.
Looks like UUP has bounced off that down-trend line after all.
Odd, no?
like LT avoiding cocaine…might happen occassionally….but soon he dives in like he was an Acapulco cliff diver..
Not sure I have your metaphor straight… who is LT in this instance, and why do you, a long term skeptic, have any faith in the dollar whatsoever?
You realize that we think alike and yet we are coming out with 180 degree opposite recommendations?
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yes…good point…Jake..whats your favorite junior gold..i have been accumulating NGD..your thoughts
Right now I’d say GSS, but only because it’s busted out. If RBY breaks and stays about 3.28, then it’s RBY.
Also look at NG, NSU, RGLD, LIHR, SA, and yes, NGD.
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gracias goldfinger
Cash – I think it sticks…
has a good ring to it…gold ring of course..
was confusing..LT was the dollar..and I have no faith in it..just feels like the crowded side right now..
Owe you another big solid Jake for PAAS – bought it right on your reminder – the PM’s have always worked for me under your guidance.
Hope HLCS isn’t making you too seasick if you bought it. I kinda expected a big ride. Picked up more this am since I’m [speculatively] keeping it at roughly 20% of my aggressive portfolio. I work my tail off and can’t watch these things all day, and IMHO this will give little or no warning on big moves. I also can’t easily move in and out since I live with a 3 day lockup of funds with my IRA – a big handicap for day trading.
I have a small position, no worries. I can wait on it, or take a loss. My golds and silver are screaming, so all is good.
SLW is my number one pick, btw.
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RUBY is ripping, btw, and if you want a real blow your arms off HLCS-like hand grenade, take a look at PMU.
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indeud, jake!
SLW is officially BTFO, next target:
$11.00
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Woerd
NGD looking good for swing trade..imo.
Verified, NGD is now BTFO as well. Fire all starboard cannon.
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Release the hounds…
Cheers!
Added 80 SLW December 7.50 calls @ 3.40.
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If HL keeps going, it is going to get a huge short squeeze. I think it was 15.5% last time I looked.
Come on HL – go, go, go!
I still have MDW from long ago. It is ripping, too. Just a few more days like this and I will be back to break even on that one. LOL
Sold 1k AGQ @ 50.27
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Damn fine day in the mines Jake – congrats and thanks.
Hey Jake,
Always love the metals and miners and appreciate how you track them. What are you thinking about TC here? It hit a pretty important fib, and sometimes you have to buy em when it hurts. I think it’s too early to want to fill the mid July gap and this fib should get us a decent bounce.
Thanks in advance,
NHH
Never mind it seemed to have worked out just fine 🙂
Sorry — I thought I had responded to this on my Crackberry, but it must’ve gone into the ether.
I would feel comfy over $12 here. I have sold none of my stake, but then I was in in the low sixes….
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No apologies necessary 🙂 Stalk that one pretty close and took my chances with the pull back yesterday to the fib. Nice gap up helped me feel a lot better about it 😉