Good Morning America! (Gold Pullback to 1140)

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Erik T.'s picture
Erik T.
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Good Morning America! (Gold Pullback to 1140)

Good Morning America! Have you checked the value of you Gold holdings today?

It's been a hell of a day (Friday Nov. 27) here in Asia. It started around 1am New York time. Gold took a plunge from 1194 earlier in the day to 1139. I got stopped out of most of my holdings at 1139.90, within a few ticks of the absolute bottom. I bought most of it back when it became clear that was the bottom, but I still lost $10/oz in the process on average. S&P futures took a similar plunge from almost 1100 down to 1167.50. Both are now recovering, but Gold just took a $7.50 plunge and broke through the trendline to the downside decisively just in the time it's taken me to type this paragraph!

I'm sure the Dubai news had something to do with setting the stage, but my paranoia is also kicking in and I'm pretty sure this was a stop-clearing run (downside manipulation) orchestrated by someone sleazy. 1am after Thanksgiving night in the states is a PERFECT time to orchestrate a plan to take out the stops in the market. All the big money managers were asleep after a big holiday evening. Just too big a coincidence to write off to the Dubai news, IMHO.

It will be very interesting to see what the NY open brings. I could see either a big resurgence of "opportunity buying", or everyone could get spooked and resume the selling pressure well below the overnight low of 1139. I'll be glued to my screen...

Anyone have any news or commentary to account for this? I can believe the Dubai news wasn't helping the market, but a sudden collapse at 1am on a holiday night smells fishy to me. I don't think it was Asians doing all that selling.

Erik

Morpheus's picture
Morpheus
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Re: Good Morning America! (Gold Pullback to 1140)

SeekingAlpha is all over this.

Look out markets. They open in 30 minutes and I'm betting that this is going to be a rough ride today.

www.seekingalpha.com

Davos's picture
Davos
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Re: Good Morning America! (Gold Pullback to 1140)

Tyler had a piece a few days ago questioning the expiration date of gold being 4 days after the holiday, even asked if they were expecting something bad this holiday weekend.

IM never so HO I think there is and will be:

  1. Massive flight to (PERCEIVED) safety  (equities sold for securities)
  2. Bond yields and dollar prices will go up
  3. Then the banks will tank, 4-5 to start and then it will set off the derivative chain and all hell will break loose - at that point gold will head back north to numbers we have never seen before

Caveat:  I think they planned this hoping the holiday would:

  1. Catch everyone napping after turkey dinner
  2. Give them time to prop up the 5 major zombie banks

This is a slippery bit of runway, and a tough call from my perspective, but given the enormity (600 trillion to 1.6 quadrillion in toxic off balance sheet derivatives) and given who is in the captains seat I'm glad none of my babies are on that economy flight.

 

Highly recommended reading:

EASTERN EUROPE IS A POWDER KEG

MOBIUS IS RIGHT

TIMING IS VERY SUSPICIOUS

How Bad is it Really Doc?

RANsquawk 27th November Morning Briefing - Stocks, Bonds, FX etc.

DUBAI DEFAULTS

 

 

r101958's picture
r101958
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Re: Good Morning America! (Gold Pullback to 1140)

I do not know if I believe in coincidences.  This conveniently occurs just when the dollar is taking a dive and gold is ready to hit 1200? Now we are looking at another round of deleveraging? What better way to prop up the broken system and inflated dollar a little while longer than to start a bit of deleveraging. That it happens while people are eating turkey and watching football is not surprising.

Davos's picture
Davos
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Re: Good Morning America! (Gold Pullback to 1140)
r101958 wrote:

I do not know if I believe in coincidences.  This conveniently occurs just when the dollar is taking a dive and gold is ready to hit 1200? Now we are looking at another round of deleveraging? What better way to prop up the broken system and inflated dollar a little while longer than to start a bit of deleveraging. That it happens while people are eating turkey and watching football is not surprising.

Agree, but the gold genie I very much doubt will be contained.

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Erik T.
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Special market hours today???

Does anyone know for certain whether NYSE and/or NYMEX (i.e. Gold futures) are trading special hours today? The calendar I have shows today as a regular business day, but someone in another thread said something about today being a "half day" for the markets.

Thanks,

Erik

 

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Davos
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Re: Special market hours today???
ErikTownsend wrote:

Does anyone know for certain whether NYSE and/or NYMEX (i.e. Gold futures) are trading special hours today? The calendar I have shows today as a regular business day, but someone in another thread said something about today being a "half day" for the markets.

Thanks,

Erik

 

rule 48 invoked, 

Morpheus's picture
Morpheus
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Re: Special market hours today???
ErikTownsend wrote:

Does anyone know for certain whether NYSE and/or NYMEX (i.e. Gold futures) are trading special hours today? The calendar I have shows today as a regular business day, but someone in another thread said something about today being a "half day" for the markets.

Thanks,

Erik

 

Yes. My zecco account is limiting wire transfer orders today.

 Important Holiday Notification
Thursday, November 26, 2009 is Thanksgiving Day and we will be operating on the following holiday schedule:

Thursday:    U.S. securities markets and exchanges will be closed. As a result all requests to process wires, ACH transfers, checks as well as any movements between money market funds will not be processed due to the banking holiday.

Friday:    As a result of the early closure of U.S. securities markets and exchanges at 1pm EST, all requests to process wires, ACH transfers, checks, as well as any movements between money market funds submitted after 10:30am EST will be processed on Monday, November 30.

Monday:    We will resume normal trading and cash transfer activities.

We apologize for any inconvenience.

 

utecity's picture
utecity
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Re: Good Morning America! (Gold Pullback to 1140)

Davos,

FYI, the link on  Rule 48 invoked was written on March 17 2008. Not sure if it still pertains.

JAG's picture
JAG
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Re: Good Morning America! (Gold Pullback to 1140)

Looks like the Plunge Protection Team is now working in the gold market as well. I guess its hard to devalue the dollar if gold is dropping in price. LOL

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Morpheus
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Re: Good Morning America! (Gold Pullback to 1140)
JAG wrote:

Looks like the Plunge Protection Team is now working in the gold market as well. I guess its hard to devalue the dollar if gold is dropping in price. LOL

Or the psychology of the Dubai situation presently a ripe opportunity to suppress gold prices? That's an alternative hypothesis worth considering.  Perhaps gold isn't falling because of a strong dollar. Perhaps pushing gold down on the Dubai news is propping up the dollar. Gold's been in need of a correction lately. It's too overheated. Toss in some bad news + a lot of shorting and crap paper and perhaps??? Just entertaining the thought....

The Federal Reserve has openly admitted to GATA that it manipulates metal prices under the Strong Dollar Policy. A lot of people don't know that. Which IMO is sick because it distorts market information and anethetizes the carry in the coal mine, which is gold vs. the dollar valuation.

Furthermore, the Plunder Procurement Team is notorious for manipulating markets. We all know that. That's their job.

Free markets? If this is a free market I'd hate to see what central planning looks like.

Erik T.'s picture
Erik T.
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Re: Good Morning America! (Gold Pullback to 1140)

I thought the final half hour of trading was very telling. Gold and the S&P were moving pretty much in lockstep all day Friday, then during the last half hour of trading, the two appeared to decouple, with the S&P moving sharply down as Gold moved sharply up at the same time.

Anyone else notice this or have an opinion on it? The last half hour of trading is always the most important, and what this is saying to me is that the S&P may be getting ready to plunge but this time people have perhaps wised up enough to recognize that the "flight to quality trade away from Gold and into U.S. treasuries" that most participants followed last time had it exactly backwards. Gold is the safety asset, but last time the bulk of the market "didn't get it". Looks like maybe this time they get it?

Erik

 

Ken C's picture
Ken C
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Re: Good Morning America! (Gold Pullback to 1140)

Erik,

I think you may be right. It looks like there is a "floor" price under gold in the 1140 area. It makes no sense to me that gold should lose value against the dollar when the dollar is toast. It will be very interesting to see what happens on monday (or sunday night).

 

Ken

 

idoctor's picture
idoctor
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Re: Good Morning America! (Gold Pullback to 1140)

Erik I thought this serious with Louise Yamada was worth the listen.

1.


 
2.

 
3.

 
4.

 
5.

http://www.cnbc.com/id/33687324

 

Good, humble, kind, thoughtful. Were she running for high office I would vote for her.

Gigem77's picture
Gigem77
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Posts: 12
Re: Good Morning America! (Gold Pullback to 1140)

The timing of the announcement is suspicious.  People overreacted and raised cash by selling things where they had profits.   Some dollar shorts covered,  likewise gold longs booked some profits and I bet the big commercial shorts were covering Friday into that dip.    There is a fear that US funds will just book profits and go home for the year.  I think the Friday morning low was a buying opportunity.   Abu Dhabi will help Dubai,   http://news.yahoo.com/s/nm/20091128/bs_nm/us_dubai_abudhabi   and that will support markets Monday.  The UK will have to print more money to bail out their idiots who made the loans to Dubai.  That is gold positive.

The IMF is increasing it's scope and ability per Doug Nolands' page at Prudentbear.com  November 25 – Bloomberg (Sandrine Rastello):  “The International Monetary Fund said it will have access to a credit line of up to $600 billion to make loans during financial crises after contributing countries agreed to fold commitments into one pool. The agreement, yet to be approved by the IMF board, adds as many as 13 members from the current 26 to the so-called New Arrangements to Borrow, including emerging nations China, Russia, Brazil and India, the IMF said… The decision ‘marks an important moment for multilateralism and the fund, which will help the IMF’s effectiveness in its response to crises,’ Managing Director Dominique Strauss-Kahn said…”

Buy the dips and sell the rips. . . 

Erik T.'s picture
Erik T.
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Posts: 1234
Re: Good Morning America! (Gold Pullback to 1140)

Well Monday was another roller coaster ride here in Asia. Gold markets opened up, then crashed $10/oz in a matter of minutes, then fully recovered, then traded sideways for a few hours, then crashed almost $13 in what seemed like less than a minute watching the chart but was really probably 10 or 15 minutes, then fully recovered again then crashed again a couple more times.

At times Gold and S&P futures were moving in lockstep, at others they were perfectly decorrelated. Gold and Silver moved in sympathy at times, and decoupled at others. Sea state confused, a sailor might say.

My sense is that the market knows something BIG is going to happen during the New York trading session, but nobody can decide what. I took a nap this afternoon since I expect it to be a late night... I figure anything is possible in the next 24 hrs as the world tries to figure out whether the safety trade should be toward or away from gold.

Erik

 

cat233's picture
cat233
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Re: Good Morning America! (Gold Pullback to 1140)
ErikTownsend wrote:

I figure anything is possible in the next 24 hrs as the world tries to figure out whether the safety trade should be toward or away from gold.

Erik

Just do what the charts say...Laughing

Mike Pilat's picture
Mike Pilat
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Posts: 929
Re: Good Morning America! (Gold Pullback to 1140)

FWIW, I continue to hear increased chit chat (rumors) of India, Germany, and of course, China desiring to buy more and more. If this crisis has indicated one thing to investors, I suppose it is to not fight the central bank. With that in mind, international cbank support seems to provide a backdrop of support for metals prices. Of course, it is best to be opportunistic in taking advantage of this (follow the charts).

Although I admittedly hear somewhat biased news (if you can call anti-MSM or 'independent' a bias unto themselves), the acknowledgement of political corruption in America continues to become more widespread. Recent polling data seems to show a little confirmation of this as well. Many of the cyclical / bearish commentators point to the strong potential of a geopolitical event in conjunction with a double dip and I think that is a strong possibility in the next few years. Historically, governments have gone to war or invented false crises to distract the masses from a terrible economy and I personally would be looking for something along these lines if we don't make a strong exit from the recession in 2010. The only things that would give me pause in being a mid / longer term gold bull would be a swift and definitive end to our wars and international operations and/or a frank discussion and solid plan of action to reduce the debt and cut the size of our government.

As I write this, the US futures look set to open slightly lower despite a weaker dollar. This is not exactly a strong repudiation of last Friday, nor is it a show of renewed confidence after an anomolous panic. That said, we will just have to see what happens. I believe this will be an important week.

Mike

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