John Williams Warns Of "Severe And Violent Sell-Off In Stocks"

Jim Sinclair’s Commentary

New York State pension funds are crying ENOUGH!
International investment firms shocked. For 30 years they have been sticking pension funds with crap and now someone has the nerve to say NO MORE!



Jim Sinclair’s Commentary

QE to infinity is not a discussion, it is all that the Fed has. 

Failure to perform will open the darkest of black holes in Western world economies immediately. That will hasten the destruction of the dollar and all Western currencies in terms of gold.
Gold will trade at $1650 and beyond.

Another Perfect Storm Brewing for Markets and the Economy by: Bo Peng October 15, 2010
A few major factors/events have conspired recently to meet up at a singular point in time.
1. Either QE2 disappointment or death of USD
It’s been a textbook case of "bad news is good news" in the past few weeks, entirely driven by QE2 expectations. The expectations are so high that inflation is finally being priced in (see 30-yr bonds, commodities, and gold), and Bernanke would have to do it even if he had a change of religion tonight, or else. The only question is when and how much. While I don’t know the answer, I’m sure it lies somewhere between a dog and a fire hydrant. If QE2 is not big enough to cause another 10% drop in the dollar index, it’ll snap back 10% along with equities/gold/commodities crashing through a significant correction. If it is big enough to meet the markets’ insane expectations, it will most likely kick the currency war into full speed and start the sequence that leads to the dollar’s death as the international reserve currency.
Of course, theoretically it’s possible to stand a pencil on its point. I just don’t think it’s financially wise to bet on it.
Funny thing is, despite the overwhelming cry for QE2 and the markets’ seeming enthusiasm, few expect it to produce meaningful real growth. In other words, the Sept rally in equities has been driven by depreciating dollar and expectation of inflation, not necessarily growth. This is truly a nightmare scenario.
More…


Global Currency Meltdown


Why “Credible Programs” at the Fed are Anything But

Somebody jumps through hoops to get real gold out of an ETF

 

What bulls dream about: trapped gold and silver shorts

 

Hourly Action In Gold From Trader Dan

Posted: Oct 15 2010     By: Dan Norcini      Post Edited: October 15, 2010 at 2:24 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
“Trick or Treat” – That sums up the much awaited speech from Fed Chairman Bernanke. Or perhaps Shakespeare can be slightly modified:
“To ease or not to ease – that is NOT the question. Whether ‘tis nobler to ease in large quantity immediately and suffer further insult to the Dollar as it bears the slings and arrows of the fickle Foreign exchange markets or take arms against that sea of troubles and by opposing them, slam the stock market into the sleep of death. To die, to sleep no more – yea, that is what will happen to me should I end the heartache of the weary economy and the thousand natural shocks that doth pursue it by depriving it of its life’s sustenance. Ay, there’s the rub. For who could bear the whips and scorns of time should I sit idly by in modest stillness and humility while the blast of war sounds against the prosperity of this kingdom. I will stiffen the sinews, summon up the blood, lend my eye a terrible aspect, set the teeth, stretch wide the nostril, hold hard the breath and come to bury the Dollar, not to praise it. Henceforth, beware the ides of October”.
Translation – we are going to gets more Quantitative Easing although no one is sure of just how much.
Do any of you find it offensive that the Fed believes its role is to produce inflation? Apparently a little inflation is a good thing but just not too much of it. Deflation – bad; inflation – good. Hmmm… Personally I would love to be able to leave an inheritance to my children in which the Dollar of my day would still buy the same amount of goods in their day. That is obviously a no-no to the Fed which has presided over a nearly 97% devaluation in the Dollar since their inception back in 1913. These guys seem to believe that the way to create wealth is to pump up the money supply and artificially inflate the price of various assets thereby producing a “wealth effect” which generates consumer spending.
Given the situation, perhaps that is all Bernanke could really say for it is evident that had he announced forthrightly the size and scope of the expected QE, the Dollar would have collapsed, gold soared through $1,400, the Euro taken out 142 and crude oil probably have levitated above $84.
These Fed chairmans have all learned how to play the game by now knowing full well that the markets hang on their every word and pour over their speeches like diviners looking for clues to the future. They speak out of both sides of their mouths so that there is usually something for everybody. Proponents of further QE got that while those concerned about the effects on the Dollar got that. The market reacted as some of us anticipated it might do yesterday when the QE amount was left intentionally vague. Having factored in a large Fed program already, traders who were short the Dollar covered and pocketed profits while gold and silver longs did likewise by selling some of their positions and booking some gains also. Dip buyers however did make their presence felt in both markets in spite of the push back above 77 in the Dollar.
Gold closed at the highest level ever on a weekly chart after setting a new record in nominal terms during Wednesday evening’s session. I would like to see it stay above $1,350 next week on any pit session close as that would evidence that buyers on the sidelines are still interested in the metal while those already long are confident adding on to their positions even at current levels. A dip towards $1,330 – $1,325 should uncover very strong buying if the market posture is to remain as strongly bullish as the current chart patterns suggest.
Silver is still very strong on the charts given the fact that it has run so far and yet experienced so little in the way of any setback in price. There is some light chart support near $24 followed by better and more substantial support closer to $23.20.
The HUI is still hanging tough above the 520 level and if it can close out this week here on a strong note, it will look very good on the long term charts. A close below 520 would be disappointing for the immediate short term prospects but as long as it holds above 500, the weekly chart will look okay. I would not like to see it close below the 490 level as that would portend a delay in any new uptrending move.
The Dollar’s pop off of Bernanke’s comments are not especially inspiring as it still looks and feels heavy to me. One would have thought that it could garner a bit more of a short covering jump but at this juncture, a mere 30 points given the extent and severity of its recent decline has to be unnerving for would be Dollar longs. I want to look at the COT for the Dollar in this afternoon’s reports to see how the momentum funds are positioned. It was only last week that they had moved to establish a NET SHORT position after being long for the better part of the last eleven months. That’s right – the move lower in the Dollar on the USDX has been funds ditching longs and not establishing a sizeable short position. I suspect that has changed considerably over the last week but one thing is for certain – any fund net short position is still very small by any standard of comparison to historical data.
Bonds got hammered on the long end today as the market reacted to the comments of Bernanke that the inflation level was too low. That was interpreted as meaning they will not be buying the long end in their next round of Treasury purchases and down went the bonds. We’ll see if they really believe that if they get back down towards the 130 level. That has been a pretty good level of chart support in the past. Below that 129 comes into play. I think we are going to get more of a range trade in this market until the actual QE is engaged then the market will examine the size and scope.
The problem for the Fed is that the job market stinks and that is going to force their hand. Whether it will do any good is unclear. Personally I doubt it. If low interest rates were the cure, the patient would already be recovering. The problems are systematic and require policy changes at the Federal level. A Republican takeover of the House in the November election might keep the worst aspects of the current Administration’s policies from further wrecking the nation’s fiscal condition but as far as actually advancing any new and actually effective remedies for what ails the nation, that is doubtful until 2012 at the earliest because anything meaningful will be vetoed.
As far as the rest of the commodity world goes today – Cotton finally fell back to earth in a big way after its huge price surge. It is now limit down with a large pool of sell orders sitting there waiting to be filled and no buyers. Maybe we can get some cotton underwear after all. Corn is a tad weaker although it does not appear willing to break much lower. Copper is higher even with the bump up in the Dollar as it is displaying a lot of resilience. Platinum and palladium are sinking lower today. Lumber after being limit up for two days in a row this week hit limit down today although it is off the worst levels, just barely. That is one market that will give anyone who tries to trade it a shortened life expectancy due to gastric related illnesses.
Crude oil fell back to the lower side of its recent trading range as once again its rise was short-circuited up above $83. That level is establishing a great deal of technical chart significance. Natural gas continues its disappearing act as supply overwhelms demand. The moo-moos are up today as packers chase cattle to fill beef needs. All in all overall the commodity sector is seeing a great deal of weakness as money flows out of it today due to the bump in the Dollar and the failure of the anticipated QE to excite the trading community.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini