Bear Cave 2 (Bull Allowed)

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The Coming Bust
By: Tim Wood | Fri, Jan 24, 2014

This is a bear market rally that is not apt to end well. Many try to discredit such thinking and my only response to that is that anyone trying to do so is either uninformed as to the totality of the supportive data, as was presented here in one small way with the M-2 chart, or they are deceptive. The potential for a financial apocalypse is enormous. In the meantime, this madness will continue until the proper setup to cap it is seen. At which time, it will be checkmate for the market and the economy. Just as the practices that stretched the last bear market rally up into the 2007 4-year cycle top only served to make matters worse, so is it apt to be the case this time.

You have been warned!


http://www.safehaven.com/article/32517/the-coming-bust
 
Selling Out Seniors

By: Dock Treece | Fri, Jan 24, 2014

The Fed's preferred method for "providing liquidity" over the past several years has been a combination of several steps. First, interest rates were pushed down to artificially low levels - and kept there. Second, the Fed provided liquidity through asset guarantee programs. Most recently, several rounds of quantitative easing provided more direct injections of "liquidity" to our nation's financial system. (Note: The substitution of "financial system" for "economy" is intentional, as liquidity was provided to one but most certainly not the other.)

These steps, as many readers will note, have been discussed in this space numerous times. However, at the risk of sounding repetitive, let us summarize previous articles by saying that none of these steps was taken to benefit the American public; nor were they taken to benefit America as a nation. They were taken to help big banks.

In fact, this process has actually done a great deal to hurt Americans - most especially seniors. Most retired Americans provide for themselves through fixed income solutions; be they CDs, bonds, pensions, old 401ks, annuities, or any one of a number of various products. The majority of these structured products are tied to interest rates and consumer prices. When interest rates are higher, investors holding bonds are paid more on their investment - in other words, their incomes are higher. Most structured fixed income products behave according to this general principle.

Selling Out Seniors | Dock Treece | Safehaven.com
 
Cyclical Bull for Gold
By: Bob Hoye | Fri, Jan 24, 2014


The following is part of Pivotal Events that was published for our subscribers January 16, 2014.
Signs Of The Times

"China's audit of local governments exposed an increased reliance on shadow banking, swelling the risk of default on $3 trillion of debt."
-Bloomberg, January 6

"Investors are bailing out of emerging markets from Turkey and Brazil to Thailand and Indonesia, extending a selloff that began last year."
-Wall Street Journal, January 9

"A roaring revival in the market for loans is boosting the fortunes of giant financial firms."
-Wall Street Journal, January 9

"Stay fully invested - we don't have bubble troubles yet."
-CNBC, January 14

Since November we have mentioned how fascinating it is when a methodical bull market lifts off to a speculative surge. Typically buying becomes compulsive and the numbers are now at levels seen only at important highs.

How long can this degree of levitation last?
Can the overbought condition be eased by a minor setback to flat trend?

Cyclical Bull for Gold | Bob Hoye | Safehaven.com
 
 
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Saturday, January 25, 2014

THE MOST DANGEROUS CHART IN THE WORLD

Last month I warned about the bubble in the stock market, and what was going to happen when it popped. Make no mistake the chart of the S&P is the most dangerous chart in the world. When this parabolic structure collapses, it is going to bring down the global economy.

Back on January 3 I instructed my subscribers to buy long-term puts on the market to take advantage of the collapse as I knew it was eventually coming. We should know by early next week whether or not those puts are going to pay off huge in the next two weeks or whether we will take a modest profit and reenter them at NASDAQ 5000.

Whether the parabolic structure collapses next week or in two months we all know what the Feds response is going to be. They are going to reverse their taper decision and double or triple down on QE. The problem is that when a parabolic structure collapses it can't be put back together. My theory all along has been that when the stock market bubble pops the Fed would then completely destroy the dollar trying to pump it back up and that liquidity would then flow into the commodity markets instead of the broken parabola of the stock market and create another inflationary event similar to 2008.

Smart Money Tracker: THE MOST DANGEROUS CHART IN THE WORLD
 
This is special intraday update #1966b for Friday morning, January 24, 2014.


I bought KOL at 17.7965 with a market order using 0.10% of my net worth, which I would rate as an 8 on a scale of 0 through 10. KOL is a fund of coal mining shares which is one of the very few mining subsectors that hasn't rebounded significantly from its lowest levels of 2013. KOL touched 17.16 on June 24, 2013, which even after adjusting for its 44-cent dividend on December 23, 2013 means that it has increased only 6.3% from that nadir. To find a lower price for KOL, you have to go all the way back to April 29, 2009. I have added a new ladder of orders to purchase more KOL each time it drops another 50 cents, for an equal-dollar amount each time.

From a fundamental point of view, global demand for coal has never been higher, and has been steadily increasing, while supply has been unable to keep pace. There are frequent media stories about why "unlimited" global supplies of "cleaner" natural gas will cause coal to become obsolete, and how new environmental restrictions will be imposed on coal producers (all of which are inevitably "postponed"), and other overblown concerns which have caused the price-earnings ratios of many coal producers to slump into single digits. Especially since nearly all other mining subsectors have been rebounding for several weeks to several months, it is almost certain that coal mining shares will soon join in the renewed uptrends for commodity producers which could continue for more than a year. When the majority of subsectors within a given sector have been positively diverging, it often makes sense to buy the few which haven't yet jumped aboard the bandwagon.

True Contrarian
 
robo said:
I know this has been posted before, but it does make you go.....Hmmmmmm.......when you look at it. I'm not in the crash camp!


http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/01/20140113_1928.jpg
Click to expand...


This is a textbook 3 peaks and domed house chart formation playing out. The top of it is a H&S pattern and we are nearing the right neckline, I think we get a bounce and put in the right shoulder starting early next week before selling resumes. Here is a chart from another site depicting where a possible neckline is, 3rd post down:

SPX 1760 - mid week? - Traders-Talk.com

This second link talks about the 3 peaks and domed house pattern: If it plays out we are just beginning the downturn in equities.

http://thepatternsite.com/3peaksdome.html
 
Advice that I'm really going to try and take, but it will not be easy for me since I really like to day-trade......


There are times in investing when over analyzing the day-to-day wiggles of positions will either cause additional losses or sacrifice potential gains.

In my career, I have been the most successful when I:

-Confront the wall of worry/public fears and buy big early in a new intermediate cycle
-Don’t overtrade or overthink the day-to-day wiggles
-Hold for several months through the meat of the intermediate cycle

With regards to our positions, nobody knows whether gold and gold miners will be up on Monday or down on Monday. Nobody knows whether we saw the top of the first daily cycle today or it still has another week to the upside. The good news is that IF this is a new intermediate cycle then it should rise for a few months while stocks correct and/or the dollar moves into a multiyear low. Once again, I am not expecting gold to get above the massive resistance at $1525 any time soon. However, a move to the $1435-$1520 area can be very profitable. It is also very likely that if we overtrade or overanalyze this intermediate cycle we are not going to capture the majority of that move. If we think we can squeeze every ounce out of this intermediate cycle in both directions then we will probably catch very little once we start getting whipsawed. If you have had a rough 2-2.5 years in the metals market then I believe this is the best chance to make back and add to gains. We have negative sentiment everywhere, price is above the moving averages, stocks are potentially moving into a yearly cycle low, junk bonds are cracking, treasury bonds are rising, and the Yen may have bottomed. That is the best combination of gold-positive inputs we have seen in a long time, and it represents a polar opposite from Sept. 2012 when everyone thought that QE was going to launch gold higher. The market tends to do the opposite of logic because logic allows you to dig into a position and hold regardless despite losses and negative price action.

Obviously, for risk management purposes I am keeping an eye on silver because it and copper and emerging markets are being weighed down at the moment. However, I have to place the odds extremely in the camp of gold being in a new intermediate cycle based on the price action these last few weeks, and it would be unlikely for silver to collapse to new lows. Silver could technically underperform gold (although that would be slightly unusual and more of a risk-off phenomenon), but if we are in a new intermediate cycle then the entire sector should at least form an A-B-C wave higher. The gold-silver ratio is still in gold’s favor, but if speculative money enters the sector and/or emerging markets bottom then we could see silver catch up quickly. Nobody loves silver right now and that is a good thing.

The Refined Investor | Ignoring The Immaterial
 
robo said:
Advice that I'm really going to try and take, but it will not be easy for me since I really like to day-trade......


There are times in investing when over analyzing the day-to-day wiggles of positions will either cause additional losses or sacrifice potential gains.

In my career, I have been the most successful when I:

-Confront the wall of worry/public fears and buy big early in a new intermediate cycle
-Don’t overtrade or overthink the day-to-day wiggles
-Hold for several months through the meat of the intermediate cycle

With regards to our positions, nobody knows whether gold and gold miners will be up on Monday or down on Monday. Nobody knows whether we saw the top of the first daily cycle today or it still has another week to the upside. The good news is that IF this is a new intermediate cycle then it should rise for a few months while stocks correct and/or the dollar moves into a multiyear low. Once again, I am not expecting gold to get above the massive resistance at $1525 any time soon. However, a move to the $1435-$1520 area can be very profitable. It is also very likely that if we overtrade or overanalyze this intermediate cycle we are not going to capture the majority of that move. If we think we can squeeze every ounce out of this intermediate cycle in both directions then we will probably catch very little once we start getting whipsawed. If you have had a rough 2-2.5 years in the metals market then I believe this is the best chance to make back and add to gains. We have negative sentiment everywhere, price is above the moving averages, stocks are potentially moving into a yearly cycle low, junk bonds are cracking, treasury bonds are rising, and the Yen may have bottomed. That is the best combination of gold-positive inputs we have seen in a long time, and it represents a polar opposite from Sept. 2012 when everyone thought that QE was going to launch gold higher. The market tends to do the opposite of logic because logic allows you to dig into a position and hold regardless despite losses and negative price action.

Obviously, for risk management purposes I am keeping an eye on silver because it and copper and emerging markets are being weighed down at the moment. However, I have to place the odds extremely in the camp of gold being in a new intermediate cycle based on the price action these last few weeks, and it would be unlikely for silver to collapse to new lows. Silver could technically underperform gold (although that would be slightly unusual and more of a risk-off phenomenon), but if we are in a new intermediate cycle then the entire sector should at least form an A-B-C wave higher. The gold-silver ratio is still in gold’s favor, but if speculative money enters the sector and/or emerging markets bottom then we could see silver catch up quickly. Nobody loves silver right now and that is a good thing.

The Refined Investor | Ignoring The Immaterial
Click to expand...

dude, you start off by being simple, then you go on for two long paragraphs making it all complicated. in rehab they call that rationalization, which most often precedes a big crash. so without any fundemental analysis, your shiny metal hopes and dreams are most likely headed for the rocks. and even if the main engines were firing on all cylinders (they're not), the tide has already caught the trade and there's not enough time to turn it around.

kahwoompa. big hurt coming in all asset classes. and the dollar is worth less and less every day. where to run then?
 
CrabClaw said:
This is a textbook 3 peaks and domed house chart formation playing out. The top of it is a H&S pattern and we are nearing the right neckline, I think we get a bounce and put in the right shoulder starting early next week before selling resumes. Here is a chart from another site depicting where a possible neckline is, 3rd post down:

SPX 1760 - mid week? - Traders-Talk.com

This second link talks about the 3 peaks and domed house pattern: If it plays out we are just beginning the downturn in equities.

http://thepatternsite.com/3peaksdome.html
Click to expand...


I agree that we are just starting a New Bear Market, but there will be time to make some trades from the long side. I took a position in the S&P 500 at the close on Friday for a one day trade. The trade is based on the BB crash trade, oversold conditions, and they love to gap Mondays up. I didn't take the move in TSP, but did in one of my wife's 401k's....she doesn't like it when I make day-trades. If we sell-off enough next week I'll try another move later in the week if we get oversold enough. In my opinion it will not be straight down or a crash, as the dippers will continue to act as they did in 2013....that's what the herd does. However, a crash is possible, but not very likely.

I still think it's very possible to test or break thru the highs more then once this year. I'll be staying away from the the S Fund, but will try a few short-term moves in the C Fund. My focus will be on trading the miners and the metals, and we should be able to easily double or possibly triple our money this year.
 
burrocrat said:
dude, you start off by being simple, then you go on for two long paragraphs making it all complicated. in rehab they call that rationalization, which most often precedes a big crash. so without any fundemental analysis, your shiny metal hopes and dreams are most likely headed for the rocks. and even if the main engines were firing on all cylinders (they're not), the tide has already caught the trade and there's not enough time to turn it around.

kahwoompa. big hurt coming in all asset classes. and the dollar is worth less and less every day. where to run then?
Click to expand...

Ok....sounds good to me whatever your point was.

Good trading.
 
robo said:
I agree that we are just starting a New Bear Market, but there will be time to make some trades from the long side. I took a position in the S&P 500 at the close on Friday for a one day trade. The trade is based on the BB crash trade, oversold conditions, and they love to gap Mondays up. I didn't take the move in TSP, but did in one of my wife's 401k's....she doesn't like it when I make day-trades. If we sell-off enough next week I'll try another move later in the week if we get oversold enough. In my opinion it will not be straight down or a crash, as the dippers will continue to act as they did in 2013....that's what the herd does. However, a crash is possible, but not very likely.

I still think it's very possible to test or break thru the highs more then once this year. I'll be staying away from the the S Fund, but will try a few short-term moves in the C Fund. My focus will be on trading the miners and the metals, and we should be able to easily double or possibly triple our money this year.
Click to expand...

I actually took a very small IWM put position yesterday before the close. I am thinking more downside Monday to possibly SPX 1770-1775 area before a sharp rebound intraday followed by a a few days of upside to 1830ish. this is total speculation on my part though.
 
burrocrat said:
my point was about overthinking. but then i overthought it.
Click to expand...

Those comments I posted above are from a very good trader in my opinion that I subscribe to, and he uses his own system (TEMPOS). He in not a day-trader, but I am and have been trying to get in on a IT trend for the metals/mines because that's what I like to trade. I use nothing other then the paid service I follow to make and take all of my trades. I prefer to relax, drink beer, and eat pizza while I'm trading (all bad for me I know) but that's what I do. I take much higher risks then most of my paid services except Rambus.

Rambus Chartology for Subscribers | The Finest in Technical Analysis and Realtime Market Commentary.

Rambus has his KAMIKAZI trades and that is what I watch....you can blow up an account easy trading those indexes, but it's what I like to trade.

You can look over his service for a week with no credit card number required just an email, but I would caution folks about signing up and taking those trades if you are not already a high risk trader. Most folks here at TSP should not try it, but for 5 days it's FREE!

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Contact Email for all questions and comments | Rambus Chartology for Subscribers


Again, the comments I posted above are from TRI and he uses the TEMPOS system. I use him with Gary Savage's cycle work for all of my position trades.....



T.E.M.P.O.S. is my personalized way of approaching the financial markets. Risk management is the number one consideration before placing any trade, but aligning entry points with the consideration of multiple beneficial variables increases our odds of success dramatically. There is no Holy Grail in investing, and every mechanical system goes through periods where it simply doesn’t yield great results because it has a structure that is limiting. That is why I believe in utilizing the best qualities of multiple systems, and cross-referencing them to give us a non-biased perspective on the markets.

T.E.M.P.O.S. stands for the following:

T – Time (cycles)
E – Energy (fractals), Elliott Wave
M – Momentum
P – Price (volume, position size, exit points)
O – Orientation (technical analysis)
S – Sentiment (COT, surveys, opinion)
Each one of these variables used individually can result in a great trade…occasionally. However, when used in combination with each other, they become much more powerful.

My fundamental structure for looking at the markets is cycles, and within each cycle I use both Elliott Wave and momentum to analyze the structure of the cycle. This leads to a strong, objective view of price action on multiple time frames.

The Swiss Army engineers knives with multiple tools because they understand that it is impossible to predict which tool will be the most useful at any given point in the future. We need to have the same multifaceted approach as investors because we don’t know what opportunities the market will present to us. In baseball, the best hitters can only work with the pitches that the pitcher gives them, they must have patience and not chase out of the strike zone. The highest paid players are the ones that produce the greatest results when that pitch finally does arrive. The market rewards investors similarly.

Join me in refining your investing.

Steve Chapman, TRI


I have five paid services I use, and most of them use different data to make trades. There are times I disagree with all of them, and stay flat or make a trade against what they are recommending. If there is one thing I have learned over the years is that there is NO SYSTEM out there that will get the correct calls all the time, so it's all about Risk Reward and Risk Management using position sizes.


Anyway, have a nice weekend.


More on Rambus for those that like to trade the Metals/Miners....and It's not an easy thing to do.....

http://www.safehaven.com/author/661/rambus-chartology
 
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