Talking Turkey

Lessons From Mr. Partridge

From Reminiscences of a Stock Operator, ‘Turkey’, aka Mr. Partridge, was much older than the rest.

The rumor in the broker’s office was that he was rich.

Even so, he was not contributing to heavy commissions (i.e. day and swing trading) as far as Livermore could tell.

The other thing was, that he never offered advice.

If a stock tip worked out, he would thank the tipster … if not, you never knew if he took a position or not.

Losing The Position & Psychological Impact

Turkey’s ‘losing the position’ remarks impacted Livermore the most. He recognized that Partridge wasn’t some old duffer; he was an astute speculator.

Losing the position: Not the same as holding a loser.

Maintaining a profitable position during a correction while at the same time, recognizing a big move could be in the works, requires (mental) strength; let the market itself say when to get in and out.

This link has Prechter’s ‘missing out’ story on big gains.

Continuing on with Turkey.

In the book, he said he ‘paid a high price for his tuition’ and does not want to incur a second fee.

Attempting to ‘play’ the market in and out then repeat, by definition, leaves one out of the big move.

It’s not the move itself; it’s the recognition that fiddling with the position and losing it, has resulted in a lost opportunity that will never come back.

The psychological damage is immense.

It’s worse than taking major loss. Watching a move take off without you when you had planned for months (or years) for the set-up, may have left no way to recover.

Which brings us to the market at hand.

Gold (GLD):

This site is not advice, and it does not make market ‘calls’.

Presented here, are posts documenting how Wyckoff analysis is being used to spot market set-ups.

Those set-ups have shown themselves over time to be potentially profitable (not advice, not a recommendation).

The weekly chart of gold (GLD) shows the up-thrust that was months in the making.

We’re going to invert the chart and so, the ‘up-thrust’ now becomes a ‘spring’.

Note:

Back in the day, when I wasted time posting on SeekingAlpha, I would get numerous complaints about ‘inverting the chart’.

They wanted it spoon-fed and did not have the mental plasticity to look at situations from the opposite perspective.

The ‘inverting the chart’ came from none other than Dr. Elder, himself … discussed in Trading For A Living or Come Into My Trading Room if memory serves.

The main interest on the ‘Alpha’ site seems to be pontificating about how sharp your pencil is; how close you can come to guess what earnings (or some other meaningless fundamental) will be at the next release.

I have not been back in years … they’re probably out there still arguing … only this time, the banter may be about which “masks” are most effective. 🙂

But I digress.

Months To ‘Spring’, Weeks To ‘Test’:

The inverted chart of GLD shows it took months for price action to penetrate support and create a spring condition.

Since then, we’ve had a move higher and now lower coming back near support.

Is this a test or a failure of the move?

It was a short week. However, it may still provide actionable data. For example, range of GLD, GDX and NEM, all narrowed. Volume contracted as well.

The inference is, thrust energy is weakening and thus weights the probabilities to a ‘test’ and not a ‘failure’.

Deflation Pivot:

Interestingly, we’re starting the see the consumer has finally reached the limit of their spending. Price are staring to edge lower as reported here and here by Economic Ninja.

Another data point, a bit esoteric, is ammunition. Pices are starting to taper off as well. Most notable is 22-LR.

A couple of months ago, 22-LR was about 0.10 per round (bullet). Looking at this site, we see the cheapest price has dropped to .080/round.

That does not look like much but it’s a 20% decline.

Summary:

Everyone has their own time frame and market approach.

Taking a cue from Turkey, referenced above, I would rather sit through a correction, incur the erosion of profit than exit and ‘click my heels’ as Prechter puts it; then watch the original position move for a huge gain without me aboard (not advice, not a recommendation).

We’re likely to find out very soon if this is a major pivot lower or if somehow, gold (GLD) bulls gain control and drive prices higher.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Inflation, Off The Chart ?

Or … Massive Supply Restriction

Use the miss-information and propaganda to your advantage.

The following items are just a partial list of recent inflation, so-called ‘news’.

$3,000 Gold Imminent

Gold & Dollar Soar, CPI Surge

Consumer Prices Soaring …

Gold & Crypto Surge

Transitory” Debate Is Over

That last one … is that like “The science is settled”?

To be fair, there is some truth in the articles. Prices are indeed rising. All types of costs are going up like food, gasoline and on.

Supply Restriction:

Here’s a strange bit of information from an unlikely source.

It turns out that copper (mining) supplies are being restricted in Minnesota. Go to time stamp 2:52, at this link and listen to the next 30-seconds.

Sure, it’s a data point of one but then again, what about all the talk of shutting down sources of oil production?

On it goes. This is supply restriction, not inflation.

It depends on what the definition of ‘inflation’ is.

Here we have one of the usual suspects parroting the now-accepted (but likely incorrect) definition of inflation. Go to time stamp 1:23.

I’m sticking with Robert Prechter Jr.’s definition of inflation and that is: Expansion of credit that causes increased spending that in turn causes demand to rise and then prices rise in turn.

Do we have expansion of credit now … or the destruction (or, soon to be) of credit? That’s called deflation.

Dollar … Still Not Dead

The dollar of course, is the wild-card.

Everybody’s expecting a collapse but darned if that’s just not happening. Actually, the opposite is taking place.

Now, all of a sudden it’s a “Contrarian Trade”. You can’t make this stuff up.

We’re coming up on the one-year anniversary of this post.

It postulated there was potential for a significant, medium-to-long term reversal in the dollar.

Getting The Picture

In a way, the dollar post and subsequent ZeroHedge one-year-later recognition of the obvious, define what this site’s all about.

As stated in the ‘About’ section, not every analysis works out. To borrow a quote from David Weis, ‘Sometimes I’m 100% wrong’.

Presented here are analysis, actions, course changes, attempting to maneuver through the largest economic and population collapse in world history.

The main focus is not to increase followership … although that is happening.

As the follower numbers increase, it’s a good sign that more are becoming aware of how manipulated and controlled is the entire narrative.

One way to separate from the effect of the falsehoods, is to become proficient at reading price action. As David Weis used to say, ‘What’s the market saying about itself?’

Which brings us to the current juncture. Gold

Gold, At A Crossroads ?

The current assessment of gold (i.e. bearish or reversal potential) is similar to the dollar from a year ago.

Different from the dollar, are the momentum (MACD, etc.) indicators … which are currently pointing higher.

In the dollar, there was a bullish weekly MACD divergence helping us along.

Not so with gold (GLD).

What we do have, and what the linked list above provides, is a look into a type of mass hysteria.

The ‘pegging the meter‘ article that came out late Friday caused only a blip higher in GLD and GDX.

If we’re at max persistent inflation already, is there any more upside left?

Stay Tuned

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Gold … Bulls & Bears, Fight It Out

… And, In This Corner …

The fight is on.

Pre-market action in miners GDX, shows a slightly higher open with inverse fund DUST below yesterday’s low.

Is the short set-up busted?

In the markets, anything can happen but we don’t know who’s really in control … yet.

Even as the dollar powers higher, gold bulls could overpower deflationary conditions pushing gold and the mining sector up as well.

To do that, they’re going to need to overcome some significant resistance obstacles.

Let’s take a look at just a couple.

Senior Miners GDX

The un-marked chart:

The mark-up:

The mark-up shows the first two layers of resistance. The blue line is the Up-thrust (potential short) condition.

The dashed black line is not so easily discernable. It was formed way back in late July and early August.

The next two charts zoom into those areas of interest; providing evidence, getting above these levels may require a sustained effort by the bulls:

Summary:

The ‘inflation’ news is already out.

Price action in today’s session may let us know if we’re in a drawn out fight lasting day to weeks; or will the bulls reach exhaustion during the session.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Deflation = Credit Destruction

Silver Collapse Ahead?

If and when food shipments halt nationwide and there’s nothing at the grocery store, is everyone going to run to gold and silver?

Will that be the savior?

It certainly wasn’t during the ‘Texas Freeze’. Not even on the list of must-haves.

The next planned event(s) are in plain sight for those who can see.

Mega drought in the corn belt (whether real or not), power substation blows up in Houston (that one was real) and planned destruction (or total control) of semi-trailer shipping (also real).

It’s the food supply and infrastructure first; then gold and silver (not advice, not a recommendation).

The Wells Fargo incident; inflation has likely run its course.

The dollar (and bonds) are in strong upside reversals; gold and sliver are (still) inversely correlated to those markets.

Inflation is credit expansion. Deflation is credit destruction. That’s where we are now.

Analysis: Silver

It’s the job of the mainstream financial media to make sure as many as possible are on the wrong side of the trade.

They have done well with the ‘inflation’ narrative.

Uneducated Economist puts it well; price increases are the result of supply constriction not inflation.

Which brings us to silver.

The weekly close of silver proxy SLV, has the ‘short squeeze’ already complete.

Shortages of product, continued inflation pummeling by the press, have not moved the metal higher; that’s the ‘tell’, something’s wrong.

Wells Fargo has kicked off the next round; deflation or deflation impulse.

One has to be prepared; silver may (even if only for a few days or weeks) head down to below where it started the squeeze.

Even to single digits … $9/oz., anyone?

If that happens, it means that gold and silver are being dumped onto the market while everyone’s scrambling for food, water and protection.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.