A Remarkable Prediction for Gold

The Correction Isn’t Over, But Gold’s Headed to $20,000

Marc Faber: World Bankers Are Going To Bankrupt The World: SPDR Gold Trust (ETF), iShares Silver Trust (ETF)(NYSEARCA:SLV) | ETF DAILY NEWS

Doesn't seem like any harm can come to world stock markets which climb steadily upward, but here is a voice of caution.

Marc Faber: World Bankers Are Going To Bankrupt The World

In 2008, markets were shorn of 50% in summary fashion the same way a new Marine gets a haircut.  Could it happen again?  Doesn't seem like it now.....

New term: Global Currency Reset

Google it, and read some of the plethora of features on this.

Crying 'Wolf,' or impending reality?  You decide.

Book Review: How to Win at Spread Betting, Patel and Kiri

This book is not unlike trading itself, having to deal with a considerable amount of information, some of which is not clearly sourced (e.g. what is their data source, we wrote the publisher, did not receive a final answer), some of which is contradictory, some of which is insightful -- from authors Alpesh Patel and Paresh Kiri.

Best we can tell this is their first publication.

This is more a green gold field than a working mine, no Holy Grail here, just a lot of questions you have posed to yourself and fairly pedestrian answers.  Maybe we're just not "getting it."

For example, here are the questions the authors pose, and to the best I could determine, the answers offered up to the reader:

-         Which clients win and lose? What are their characteristics?

-         The majority of spread bettors lose.  No number given.  Many winners become losers over time.

-        
- Which markets are the easiest to make money on?

-         No difference.

-        
- Which markets should retail investors avoid?

-         Winning traders focus on no more than 4 markets.

-        
- Do investors make more money in volatile markets or quiet markets?

-         In the middle

-        
- Which is more profitable: to go long or to go short?

-         Same

-        
- Do short-term/day traders make more money than long-term traders?

-         Short term, i.e. < 4 months.

-        
- What are the most common mistakes made by losing clients?

-         Let big losers run.  Winners have many small losses, few big.

-        
- How much do the top spread betters actually make?  

       Doesn't say.

-        
- Which trading systems work best?

-         Mean reversion or breakout -- is this their Big Idea?  Fade or go long?  If so, this is not groundbreaking information, traders have been all over this turf for generations.

-        
- Do technical analyst traders outperform fundamental analysis traders?

-         No decision given.

-        
- How long are the most profitable positions held?

-         Tradeoff, but winners cut losers quickly, hold winners longer.

-        
- What impact do dealing costs have on your ability to beat the market?

-         No answer.

-        
- What rules do profitable traders use for setting trade size and stop losses?  2% on the stop.

-        
- What do winners do differently from losing spread betting traders?

-         Cut losers quickly.

-        
- What size accounts do the most profitable traders have?

-         Enough size to be able to lose 2% per losing trade and keep going.  No actual size given.

-        
- How many spread betters win and how many lose?

-         “Majority” loses.

-        
- Do losers become winners and winners become losers over time?

-         The latter is true, the former wasn’t answered.

-        
- Do winners mimic what big winners like George Soros do?

-         No

The rest of the book is street smart observations, and perhaps this is equal or surpassing the aforegoing in value.  

As for the first line of the book:  "We believe that no other book has ever provided the kind of essential hard information traders need to win in spread betting as we do in this book," we did not find the bold claim to be fulfilled in its svelte 115 pages.  Perhaps you will.  For us, it was "nothing new under the sun."

A Kindle version is available for a fraction of the cost of the hard copy.

 

The Fed: "Damned if they do, damned if they don't"

Where is the Money Growth?

How's the Economy REALLY doing? The Real Deal from Shadowstats

Commentaries by Date

• At An 18-Year Low, 2012 Real Median Household Income Was Below Levels Seen in 1968 through 1974
• 2012 Income Variance Hit Record High,Suggestive of Greater Financial and Economic Crises Ahead
• Systemic Instabilities That Led to 2008 Crisis Still Have to Be Worked Through
• Housing Starts Continued in Renewed Downturn or Stagnation


Made all the more poignant, and credible, by today's Fed decision to scotch tapering....

Only (a very, very few) hard money types got this one right; everyone else blindsided by Ben

The Taper That Wasn't

Research underway: weekly options

Am researching a feature on weekly options; if you have comments, insights, trading tips, I'd love to receive them. Can credit you or leave it anon. If you would, please, write me via http://option-wizard.com. Thanks in advance.

Options Trading: The Sheridan Method

Options Trading: The Sheridan Method

Commercials continue refraining from shorting gold

DATE                  vs
Comm_Positions_Short_All minus Comm_Positions_Long_All

5/31/13	59,221
5/24/13	84,122
5/17/13	84,146
5/10/13	87,719
5/3/13	95,563
4/26/13	104,388
4/19/13	141,929
4/12/13	143,802
4/5/13	142,522
3/29/13	158,473
3/22/13	162,364
3/15/13	142,121
3/8/13	133,798
3/1/13	137,620
2/22/13	132,082
2/15/13	160,653
2/8/13	174,607
2/1/13	167,097
1/25/13	195,950
1/18/13	185,113
1/11/13	178,472
1/4/13	188,659

Commercials are the least short now that we have seen in recent times.  Many say this is setting up a powerful rally.  There are reports in the media of moguls getting long millions of calls on mining shares.   Others say gold is heading to $1000.  How will this resolve?

Writer makes case for $100-$1,000 Daily Gold Moves Becoming "Statistically Normal"

Upside Volatility In Gold Cometh; With $100-$1,000 Daily Moves Being "Statistically Normal" | Bull Market Thinking

Bullish COT data sets stage for higher gold

Each Friday, we put Commitment of Traders (COT) data under the microscope.  Specifically gold.  Most weeks it’s pretty ho-hum.  This past week -- Friday May 4, 2013 --- anything bu

We did a double take:

Net commercial shorts minus net commercial longs was in five figures.  In the raw data, http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm, it’s listed as Comm_Positions_Short_All minus Comm_Positions_Long_All.  “Comm” stands for commercials, i.e. producers, the ABXs, GGs, NEMs, et al.

Gold price	COT report date	Comm_Positions_Short_All minus Comm_Positions_Long_All
1470.70	5/3/13	95,563
1471.50	4/26/13	104,388
1405.50	4/19/13	141,929
1487.70	4/12/13	143,802
1578.30	4/5/13	142,522
1598.25	3/29/13	158,473
1607.90	3/22/13	162,364
1592.90	3/15/13	142,121
1579.20	3/8/13	133,798
1576.30	3/1/13	137,620
1581.50	2/22/13	132,082
1607.00	2/15/13	160,653
1669.00	2/8/13	174,607
1668.10	2/1/13	167,097
1659.30	1/25/13	195,950
1685.00	1/18/13	185,113
1663.30	1/11/13	178,472
1656.80	1/4/13	188,659
1657.50	12/28/12	187,664
1655.50	12/21/12	202,134
1696.20	12/14/12	214,880
1704.50	12/7/12	217,596
1715.00	11/30/12	252,047
1752.00	11/23/12	236,064
1712.90	11/16/12	224,795
1730.80	11/9/12	207,742
1676.90	11/2/12	222,764
1712.10	10/26/12	232,665
1720.50	10/19/12	247,383
1755.80	10/12/12	266,988
1778.40	10/5/12	269,270

How long had that been?  We went looking and found it:  Dec. 12, 2008 (See below).  Four and one-half years ago.

1161.40	12/4/09	308,231
1166.50	11/27/09	306,104
1150.10	11/20/09	281,546
1118.50	11/13/09	282,784
1097.00	11/6/09	283,852
1046.10	10/30/09	283,479
1054.70	10/23/09	297,493
1052.90	10/16/09	295,926
1048.00	10/9/09	281,864
1004.00	10/2/09	275,234
990.70	9/25/09	287,610
1006.00	9/18/09	284,661
1005.70	9/11/09	270,797
994.10	9/4/09	216,708
956.10	8/28/09	211,342
953.90	8/21/09	204,545
953.60	8/14/09	222,905
956.00	8/7/09	228,193
953.20	7/31/09	202,521
952.30	7/24/09	204,226
935.70	7/17/09	182,287
911.70	7/10/09	191,307
932.50	7/3/09	197,818
938.60	6/26/09	194,430
933.70	6/19/09	207,368
938.80	6/12/09	225,047
954.30	6/5/09	226,521
979.10	5/29/09	208,136
956.70	5/22/09	183,065
931.20	5/15/09	171,180
914.50	5/8/09	160,445
885.30	5/1/09	153,419
912.70	4/24/09	149,608
866.80	4/17/09	153,509
880.00	4/10/09	153,223
894.30	4/3/09	181,926
923.00	3/27/09	181,289
952.60	3/20/09	175,684
928.10	3/13/09	172,851
938.40	3/6/09	188,401
942.20	2/27/09	190,936
994.70	2/20/09	196,360
941.10	2/13/09	188,712
911.00	2/6/09	177,589
926.10	1/30/09	158,376
895.20	1/23/09	138,931
841.00	1/16/09	141,563
853.60	1/9/09	149,482
876.80	1/2/09	142,773
877.80	12/26/08	132,797
837.50	12/19/08	123,111
817.00	12/12/08	94,872

Gold was $817 on that fateful day.    One year later, it was $1161.  A stunning 42% gain.

What is a 42% boost on $1470? 

$2088.

What is the significance of “net commercial shorts”?  This is the hedge position of the ABXs, GGs, NEMs, et al.  These are the producers, typically the ones who “know” when to sell short, when to back off and wait for higher prices.   They are not always right, and these numbers are not infalliable, but usually doesn’t pay to bet against them.

So this Friday’s less than 100,000 print.

Could it be telling us that May, 2014 gold may be selling for $2088?  Or thereabouts?  Could the recent takedown in gold prices be the massive head fake so many have written about?

Stay tuned.