Euro - Absolute flushing of the "marks" by the sharks

A mistake for who? There is only one side of the trade here - right side. Success or failure will be determined by market forces, not bureaucrats.

While certain "groups" will always setup the mark(s), their operations will never alter the secular trends. The Euro will reverse as the dollar inevitably weakens when the specs and retail money have been herded (for slaughter) to the other side of the trade.

Markdown will soon give way to accumulation.

Euro and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:


Absolute flushing of the "marks" by the sharks. That's the kind description.

Euro and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:


Headline: Don't bet against euro - German finance minister

Europe's single currency is here to stay and those who bet against its survival are making a mistake, German Finance Minister Wolfgang Schaeuble said.

In an interview to appear on Sunday in Bild am Sonntag newspaper, Schaeuble said leaders of all the countries that share the currency agreed -- the euro worked toward their common good and a return to national money would be a mistake.

Be Right and Sit Tight

A lesson from Jesse Livermoore, "Be Right and Sit Tight", Reminiscences of a Stock Operator.

" There I was, short five thousand shares of UP (Union Pacific). on a hunch. That was a much as I sell in Harding's office with the margin I had up. It was too much stock for me to be short of, on vacation; so I gave up the action and returned to New York that very night. There was no telling what might happen and I thought I'd better be Johnny-on-the-stop...

The next day we got news of the San Fransisco earthquake. It was an awful disaster. But the market opened down only a couple of points...

I was short five thousand shares. The blow had fallen, but my stock hadn't...

He told me: "That was some hunch, kid. But, say, when the talent and the money are all on the bull side what's the use of bucking against them? They are bound to win out."

"Give'em time," I said. I wouldn't cover because I knew the damage was enormous and the Union Pacific would be one of the worst suffers. But it was exasperating to see the blindness of the Street...

I wasn't not betting blindly. I wasn't a crazy bear. I wasn't drunk with success or thinking that because Frisco was pretty well wiped off the map of the entire country was headed for the scrap heap. No, Indeed.

They'll tell you that it was because the first dispatches were not so alarming, but I think it was because it took so long to change the point of view of the public towards the securities market. Even the professional traders for the most part were slow and shortsighted.

Livermoore's essential message of “Be right and Sit Tight” as described by the impact San Francisco’s Great 1906 earthquake on his short position in Union Pacific draws a close comparison to that of the Great failure of the OTC derivative market in 2008 and the price of gold. For gold holders, it is exasperating to see the blindness of the Street to the damage incurred. Foreign debt held by foreigners and international investors as a percentage of GDP (national income), shown below, has climbed above 28%. The magnitude and acceleration of this trend is both staggering and dangerous.

The Street, nevertheless, following historical precedence remains largely blind to message contain with the trends. While professional traders for the most part are slow and shortsighted, history suggests that they will react swiftly when blindness transitions to sight. If you thought “Be Right and Sit Tight” is easy, it’s a lesson that many will never learn.

The equilibrium price of gold continues to rise to unbelievable levels.

Federal Debt Held by Foreign & International Investors As a % of GDP (FDHBFINGDPR) and the London P.M. Fixed Price of Gold (GOLD):

The Timing of QE2 Was No Accident

Do you think the Fed's decision to move ahead with QE2, despite the strengthening economy rhetoric, was coincidence with the rollover in the "the Formula" and "Leading Formula" in November? Don't think so. When the formula rolls over, it begins to feed on itself as described by Jim.

Identification of the real secular trends shows the path to profit in this business.

"The Formula" US Fiscal Balance vs US Dollar: Federal Government Budget As A % of GDP, 12 Month Moving Average:


"Leading Formula" Federal Taxes Withheld (TW) Less Total Government Outlays (TO) As A % of GDP, 12 Month Moving Average:


Headline: November federal budget deficit highest on record

The federal budget deficit rose to $150.4 billion last month, the largest November gap on record. And the government's deficits are set to climb higher if Congress passes a tax-cut plan that's estimated to cost $855 billion over two years.

The Treasury Department says November's budget gap was 25 percent more than the deficit in November 2009.
Source: finance.yahoo.com

FOREX-Euro falls as Ireland debt worries persist

The bad for Euro, good for U.S. dollar (by extension bad for gold and silver) news shoved onto the newswires until the weak hands are no more. The tape in the Euro, which also means gold and silver, will turn when the leverage money flows have been repositioned. The COT data will report some of this repositioning later today.

This is the beauty of the mindless herd. They are ruled by their animal instincts. This makes them easy to control.

Jesse Livermoore, one of the all-time best, encapsulates success (on Wall Street).

Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn.

That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have the brains they cannot sit tight.

There lies the foundation of success, be right and sit tight. If you have no idea what I mean, you will lose.

The dollar rose against the euro on Thursday after an Irish political party said it would vote against an emergency European Union bailout for the country and a ratings agency cut Ireland's sovereign debt rating.

The euro fell to session lows around $1.3169 EUR= and was last trading at $1.3185, down about 0.5 percent on the day.

Source: reuters.com

Americans' wealth grows, lifting hopes for economy

Americans’, largely in the dark about the forced driving stock market higher, are becoming “wealthier” from an illusion provided by currency devaluation. Truth is, Americans’ inflation adjusted purchasing power is rapidly declining, but that interpretation doesn’t sell well to public still in denial.

Household net worth grew 2.2 percent in the July-September quarter, fueled by a rally on Wall Street that catapulted stock prices. And stocks have risen more since the new quarter began Oct. 1, further boosting wealth.

Those increases are lifting hopes for the economy, especially because Congress seems about to pass a package of tax cuts for most Americans. Both factors help: The stock gains make people feel wealthier. And the tax cuts put more spending money in their pockets.

Source: finance.yahoo.com

Homeland Security taps new partner in terror fight: Wal-Mart

See something, say something? Can we narrow that down a bit? Excuse me from being skeptical, but the last time I was at Wal-Mart store the clerk struggled to identify the jewelry department that sold watch batteries. Asking that same clerk to identify and report indicators of terrorism, crime and other threats to law enforcement authorities would be a stretch to say the least. This is a dangerous Orwellian path we have chosen to follow.

History suggests that fight for liberty begins with a loud report - a shot heard around the world. Does liberty end within nothing more than a whimper, accompanied by greeter watching your every move?

By month's end, 588 stores will participate in 'See Something, Say Something' campaign

The U.S. Department of Homeland Security has enlisted a new partner in its fight against terrorism: Wal-Mart.

Homeland Security Secretary Janet Napolitano announced the unusual alliance Monday on the department's blog and in a promotional video posted to YouTube.

“Homeland security starts with hometown security, and each of us plays a critical role in keeping our country and communities safe,” she said. "This partnership will help millions of shoppers across the nation identify and report indicators of terrorism, crime and other threats to law enforcement authorities.”

Source: msnbc.msn.com

The Natural Gas Market is Talking

The natural gas market is talking to anyone that will listen. The message, however, is often garbled by emotions (greed and fear). This identification vacuum brings uncertainty. Uncertainty breeds volatility. Volatility defines natural gas.

Livermoore, of the trading masters, often wrote that there is only one side of a trade - the right side. The right side is driven not drive by emotion by rather identification. The past masters often identify the right side through reading the tape and trading instincts. Today we have computers to enhance but not replace those skills.

The breach of the November swing highs was foreshadowed by a surge in trend energy. This trend energy has surged to a new high and continues to lead price. The trend is becoming more organized with the pull of the September swing high magnet increasing. While the rally is certain produce greed and fear, it still remains nothing more than a retracement within a sharp down trend.

Natural Gas ETF (UNG):


Headline: US GAS: Futures Fall As Traders Eye US Storage Report

Natural gas for January delivery fell 4.7 cents, or 1%, to $4.559 a million British thermal units on the New York Mercantile Exchange. The benchmark contract Wednesday surged by almost 5%, settling at its highest levels since early August.

Futures have been supported recently by cold weather over the Eastern half of the U.S., a trend that meteorologists say is likely to continue through much of the next two weeks. Meteorologists with private forecaster Commodity Weather Group said Thursday that colder-than-normal temperatures are likely for some major gas-heating markets in the Midwest and Northeast Dec. 14-18, with cold spreading to the South after.

Headline: Natural Gas Overbought?

Thomson Reuters recently quoted a Houston-based analyst as saying that the weather is driving price but the rig count is still way above what it was last year, and technically the market is getting overbought. What cold climate conditions have ensured is that the price of natural gas has been on an upswing despite concerns about a weak economy and an increasing supply.