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Charts from the Lunatic Fringe.

Goldhedge

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Long term support... for the non junior Juniors... are we heading there, or is it 'this time is different'??


Screen Shot 2019-09-13 at 9.23.48 AM.png
 

savvydon

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Picked up a couple of SLV leap call options on today's action. Have a limit order in for more if the beat down continues into next week.

Tip o the hat to Strawboss for helping me keep my eyes open to what I think is a good buying opportunity.
 

louky

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Tax cuts were supposed to produce 4,5,6% gdp, but the funds were just used to do buybacks and line corporate America's pocket. Note true gdp is ~1%, just like i.said was coming at that peak 2018
IMG_20190913_141428.png
 

Strawboss

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Closed out my DUST for a nice 13% gain from yesterday and today...did a decent job of hedging...
I am now about 75% long with LEAP options - still holding back 25% cash in case price presses lower...

Charts dont look the greatest...but - we are sitting right on top of louky's box...and in my mind $1450 seems like a good place for price to bounce from if the box gets violated...so I figure about 3% downside risk in gold - and i would expect the miners to front run the turn so their loss would be less than usual...(in my estimation - which is a fancy way of saying I am completely guessing). So - I dont see big downside risk in the miners from here...although they might bleed a few more %...I am aware of the gaps in GDXJ/GDX which a more severe correction would seek out. If that happens - I have my dry powder ready...I am using LEAP options because I want plenty of time if price moves against me...or if we have a multi-month consolidation...
 

louky

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Gold COT - Funds cut their longs by only 11%. Banks cut their shorts 17% from record levels. Commercials by 10%. Doesn't clarify much, plenty of room to drop or could move up for negatively divergent high first

Silver COT - funds, commercials, banks all unchanged despite 10% drop. Prior periods, when price fell and Funds either maintained their peak or increased it, price continued to fall and they scrambled to cover losses. We'll see...
 

Strawboss

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ok guys...time to get super serious with the thinking...

Ghawar is offline. Oil is gonna skyrocket Monday. Gas prices are gonna surge...

What is gold gonna do - and how are traders gonna revalue the miners? Gold up, gas up - miners???

Trump tweeting about the US and Israel having a mutual defense treaty...
 

Weatherman

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Crude oil has been expensive before, and it will be again. But now there is a new threat. Saudi blames Iran for everything. This time they may do more than blame. Imagine a Saudi (with USA backing) attack on Iran, and Iran gets backing by Russia and China. Does that become WW3? Lots of impossible possibilities to consider.
 
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drone attacked half of Saudi Oil capacity, on CNN. interesting week ahead, so would that pressure Feds to do .50 cut? everything is operating "under the table"

just learned that it's only 5% of the world's output and we have a oil glut issue so this shouldn't shake the markets at all.
 
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Strawboss

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drone attacked half of Saudi Oil capacity, on CNN. interesting week ahead, so would that pressure Feds to do .50 cut? everything is operating "under the table"

just learned that it's only 5% of the world's output and we have a oil glut issue so this shouldn't shake the markets at all.
The bigger issue will be whether Saudis can convince the market that this won’t happen again.

Would you believe them if they made such an assurance? I know I wouldn’t...
 

Uglytruth

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I thought we were exporting oil now........
 

savvydon

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ok guys...time to get super serious with the thinking...

Ghawar is offline. Oil is gonna skyrocket Monday. Gas prices are gonna surge...

What is gold gonna do - and how are traders gonna revalue the miners? Gold up, gas up - miners???

Trump tweeting about the US and Israel having a mutual defense treaty...
Saber rattling and threats of political turmoil and worse should be good for gold and, by proxy, for miners. That is my very basic, extremely limited understanding/wild ass guess.
 

Scorpio

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just learned that it's only 5% of the world's output and we have a oil glut issue so this shouldn't shake the markets at all.
appreciate their attempt at maintaining control with these types of comments,
if metals and oil are held down when markets open, it will be expensive to do so

commentary is cheap,

oil has a lot of people with short paper in it,

events like this take precedent, and fundamentals get tossed,
it usually takes a bit for fundie's to reestablish themselves

JMO for sure
 
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itsamess

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appreciate their attempt at maintaining control with these types of comments,
if metals and oil are held down when markets open, it will be expensive to do so

commentary is cheap,

oil has a lot of people with short paper in it,

events like this rules, and fundamentals get tossed,
it usually takes a bit for fundie's to reestablish themselves

JMO for sure
Saw the same story about 5% world output and 10-12 cents a gallon increase. Seemed more like a push poll effort. After following the effect of the media screaming recession (compare Gaggle "recession" search dates versus the recent rocketing of PMs especially Ag, it seems like what Keynes called animal spirits —a spontaneous urge to action rather than inaction., rule.
 

Strawboss

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1. Ghawar is the largest oil field in the world.
2. Ghawar is...for the moment...according to reports - offline.
3. Videos show what can presumably be categorized as extensive damage from explosions/fires.
4. Houthis from Yemen have claimed responsibility.
5. Houthis are materially supported by Iran.
6. Iran has stated that if they cant export their oil - no one else will be allowed to either.
7. Sec. of State Pompeo has officially pointed the finger at Iran as the culprit of the drone strikes.
8. The US has offered to support Saudi Arabia with its security.
9. Open war between Iran and Saudi Arabia has ratcheted materially higher this weekend.
10. It would be simplistic to assume that Saudi Arabia will not respond in some fashion to the attack - and if Pompeo is pointing at Iran - that puts a certain pressure on MbS to respond accordingly - to avoid the appearance of weakness.
11. This is certainly going to add a "risk premium" to the price of oil. The question is...how much?
12. This should cause the price of gold to rise due to the increased risks of global insecurity, lessened demand for USD for oil transactions and because the attack is a direct one on what underpins the USD hegemony - i.e. the petrodollar.
13. The big question in my mind is how to calculate fair value for the miners when POG is rising alongside the price of oil as fuel is a HUGE expense in mining...
 

Strawboss

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Closed out my DUST for a nice 13% gain from yesterday and today...did a decent job of hedging...
I am now about 75% long with LEAP options - still holding back 25% cash in case price presses lower...

Charts dont look the greatest...but - we are sitting right on top of louky's box...and in my mind $1450 seems like a good place for price to bounce from if the box gets violated...so I figure about 3% downside risk in gold - and i would expect the miners to front run the turn so their loss would be less than usual...(in my estimation - which is a fancy way of saying I am completely guessing). So - I dont see big downside risk in the miners from here...although they might bleed a few more %...I am aware of the gaps in GDXJ/GDX which a more severe correction would seek out. If that happens - I have my dry powder ready...I am using LEAP options because I want plenty of time if price moves against me...or if we have a multi-month consolidation...
I am very fortunate (in my mind) to have closed out my DUST and added some additional calls on Friday afternoon...

I dont know how the next few days are gonna play out - but I would imagine some added volatility - which will price options higher across the board. That is where the Vega comes into play. Vega is one of the "greeks" used to calculate an options value. It rises with implied volatility resulting in a resetting of an option price higher. I will be paying close attention to Vega changes this week in the miners.
 

savvydon

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1. Ghawar is the largest oil field in the world.
2. Ghawar is...for the moment...according to reports - offline.
3. Videos show what can presumably be categorized as extensive damage from explosions/fires.
4. Houthis from Yemen have claimed responsibility.
5. Houthis are materially supported by Iran.
6. Iran has stated that if they cant export their oil - no one else will be allowed to either.
7. Sec. of State Pompeo has officially pointed the finger at Iran as the culprit of the drone strikes.
8. The US has offered to support Saudi Arabia with its security.
9. Open war between Iran and Saudi Arabia has ratcheted materially higher this weekend.
10. It would be simplistic to assume that Saudi Arabia will not respond in some fashion to the attack - and if Pompeo is pointing at Iran - that puts a certain pressure on MbS to respond accordingly - to avoid the appearance of weakness.
11. This is certainly going to add a "risk premium" to the price of oil. The question is...how much?
12. This should cause the price of gold to rise due to the increased risks of global insecurity, lessened demand for USD for oil transactions and because the attack is a direct one on what underpins the USD hegemony - i.e. the petrodollar.
13. The big question in my mind is how to calculate fair value for the miners when POG is rising alongside the price of oil as fuel is a HUGE expense in mining...
#13 is a complex calculation - lots of moving parts. Immediate miner stock price movements are likely to be more sentiment related than anything else. Over the medium term I agree that, while #12 speaks to higher dollar price of gold, #13 may mitigate price for the miners somewhat.

I think it is fair to say #1-12 speak to a dangerous dance unfolding on the world stage.

13 is not a lucky number.
 

louky

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Strawboss

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5pm Eastern is where we will start to see just how PANICKED the oil shorts are...

Can you imagine what this weekend has been like for those caught on the short side of oil?

OUCH...

1568553387303.png
 

Goldhedge

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Kind of reminds me of 911 when airline shares were shorted and someone made off with a boatload of cash and then the FTC destroyed the records....
 

itsamess

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Gulfwar gold vs GOLD.jpg




Gulf War timeline vs price of gold and price of GOLD (stock). Not sure what it means but it doesn't look like an immediate response. Blockade made a difference. Middle east but not Saudi's petrodollar so ?

 
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dpong

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Oil up about 10% (more or less $5) in futures trading so far.
 

dpong

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Gold and silver getting tiny bumps. S&P down tiny amount on futures.
 

Strawboss

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appreciate their attempt at maintaining control with these types of comments,
if metals and oil are held down when markets open, it will be expensive to do so

commentary is cheap,

oil has a lot of people with short paper in it,

events like this take precedent, and fundamentals get tossed,
it usually takes a bit for fundie's to reestablish themselves

JMO for sure
"If metals and oil are held down when markets open, it will be expensive to do so"...

Very true statement.

I have to believe that gold is being kept down right now - while oil has been allowed to float. It would be very, very costly to try to contain both.

Trump just openly threatened Iran on Twitter. Locked and loaded.

And gold is up barely 1%??
 

savvydon

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A lot of the metal’s blogosphere was calling for this current correction in gold to continue. The fact that COT positions were not even close to washed out supports that idea.

With this weekend’s Middle East situation perhaps seen as a black swan event how much of a metals bump will the market need to see before the banks lost their grip and we see a short squeeze?
 

Zed

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Zed

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Bob is calling that a major top in gold...

http://www.321gold.com/editorials/moriarty/moriarty091319.html


IMO we look close to a break down but not quite yet, I just can't say that the current chart is what I would call a confirmed top. We look due for a rally... IMO that is what will make or break this as a top.

What do you think? Is Bob on the money this time?
 

Zed

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Straw, I wonder if Z is sleeping in?

Do we need to send out an expedition to rouse the wizard of Oz?
No, swamped..... STUFF!!! Yeeeesh.
 
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Zed

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A lot of the metal’s blogosphere was calling for this current correction in gold to continue. The fact that COT positions were not even close to washed out supports that idea.
Yeah... but still it just looks like a bigger consolidation for now.

A correction is healthy... so that'd be fine, just not sure it's here yet... or that this is a 'major' top.

COT is right till its wrong. Then it's rocket fuel... but I have no idea if that is the case this time. Probability is the commercials will win out in time.
 

Zed

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1. Ghawar is the largest oil field in the world.
2. Ghawar is...for the moment...according to reports - offline.
3. Videos show what can presumably be categorized as extensive damage from explosions/fires.
4. Houthis from Yemen have claimed responsibility.
5. Houthis are materially supported by Iran.
6. Iran has stated that if they cant export their oil - no one else will be allowed to either.
7. Sec. of State Pompeo has officially pointed the finger at Iran as the culprit of the drone strikes.
8. The US has offered to support Saudi Arabia with its security.
9. Open war between Iran and Saudi Arabia has ratcheted materially higher this weekend.
10. It would be simplistic to assume that Saudi Arabia will not respond in some fashion to the attack - and if Pompeo is pointing at Iran - that puts a certain pressure on MbS to respond accordingly - to avoid the appearance of weakness.
11. This is certainly going to add a "risk premium" to the price of oil. The question is...how much?
12. This should cause the price of gold to rise due to the increased risks of global insecurity, lessened demand for USD for oil transactions and because the attack is a direct one on what underpins the USD hegemony - i.e. the petrodollar.
13. The big question in my mind is how to calculate fair value for the miners when POG is rising alongside the price of oil as fuel is a HUGE expense in mining...
Ghawar's decline, when it hits, should be dramatic. My first thought was ---> Is this some sort of political cover for that event. I can't say it makes sense to me yet... and I certainly can't see what Iran would get out of it. It would be madness on their part. If it really is the Houthis, I wonder if it is a proof of concept or the biggest hit they could muster?

Not really sure what to expect... I think we need to follow this for a while before it makes sense.