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Oh, It's On Baby..It's On....
WOW! What do you say after you see gold make a $50 f"ing dollar reversal from the dead lows? After bottoming out at $850 and after the rate cut, gold actually touched $900 (April Contract) before closing down a couple of dollars. Gold actually like it was supposed to. In my wildest dreams I never thought I would see what I saw today. I have seen it plenty of times the opposite way though. I guess the first clue that something was up, after the market opened, the gold stocks, got clobbered but made a light speed type of recovery. It was prolly no more than 15 minutes before ABX went green, followed by AEM and NEM. GOLD was bid down 4 points in the pre-market to close up almost $3.
So, it's on baby. We are witness to history; the greatest attempt to inflate the economies of the world. As predicted by many, the Fed cut rates by .75%, a huge move. The are prolly going to cut next Wednesday at their meeting. The smart money says they are going to cut .50%, but I think it's only going to be .25%. The markets wanted to see 1% today, but will have to wait until the 31st to see the rest of that wish.
In reality, Ben should have done nothing. Gold, oil, and many other commodities are at record high. The Fed played politics and caved to the stock market. A recession is a healthy part of any economy and in a normal economy recessions are usually quick and only a bit painful. This is far from a normal economy. This Fed cut is not going to help in the long term. Yeah, it may allow for some refinancing of bad mortgages, but it's going to drive all commodities sky high; even higher than they are now and gold will be the biggest beneficiary. This was evidenced by the action today.
IMO, if Ben had done nothing, history would have viewed him as one of the better Fed Chiefs. I say this from talking to several people who were active when Paul Volcker was Fed Chairman. People hated him and were openly cursing him when he kept raising rates back in 1980. However, history now views him as the best Chairman in history. He put the country's long term health over the short term market action. The opposite is true of Easy Al or as I call him Elmer.
I arrived at the office at 7am today, about an hour earlier than usual as I was long too many gold stocks. My gold stock trading portfolio was worth about $100k, and I was looking at a $10k loss right off the bat. In my career I have never started a day off more than $2k in the hole. To say I was unhappy was an understatement. After the Fed cut, that loss was cut in half. I did not like the action after the cut, the S+P's went back to the lows and gold had gone to where it was before the cut. I dumped whatever I didn't have too much of a loss in. Yes, I know it was a dumb move, but when you trade on a daily basis, capital preservation comes first. Who knew where this market was going and I was not going to be a hero. To make a long story short, I bot back what I sold at higher prices, when it looked like gold was going to make a stand, and ended the day down less than 1% overall. I will take that. Also a big shout out to NEM for giving back it's gains from this morning and closing up a whopping .22! Thanks!!!! But kudos to AEM, ABX and GOLD for having great days.
As Sinclair has said, this is it. The game is on. Strap in and enjoy the ride. It will be bumpy at times but I think we are finally going to be rewarded. (Even though gold is trading down $3.50 now, I still think the Asian sessions just don't matter any more as Europe and NY dictate the action.)
It's sad when a person who has been dead wrong for over $100 and does not admit he is wrong and keeps trying to sell his story that the security in question is doomed for failure.
Yes, I am talking about your friend and mine, Guy Adami, who once again on Fast Money, bashed the hell out of gold, basically repeating what he has been saying all along: He knows the fundamental story(he doesn't), he knows the CB's are buying, BUT, he has seen this movie before and it will end bad, the miners take off their hedges at the top and put them on at the bottom. It sounds like a broken record.
Guy, I have said this before, how in the world were you ever a gold trader? This bull market is in it's sixth year. Yes, it has had it's drops and will continue to do so, that's the nature of the beast. But for six straight years gold has outperformed, well, almost everything. What movie have you seen before? This is not 1980 where gold spike $450 in five weeks, this is 2008, where inflation is running rampant, children run the Fed, and we are facing an economic meltdown on a daily basis. Please give us one fundamental reason why gold will be down. Please, just one. I beg you.
After the cut there were incredible reversals in all the European and Latin America stock exchanges and most of the Asian bourses are nicely higher. I have a feeling, barring any financial blowups, the markets might rally from here into the fed meeting. After that, all bets are off.
The ride is just beginning for real, strap in.
So, it's on baby. We are witness to history; the greatest attempt to inflate the economies of the world. As predicted by many, the Fed cut rates by .75%, a huge move. The are prolly going to cut next Wednesday at their meeting. The smart money says they are going to cut .50%, but I think it's only going to be .25%. The markets wanted to see 1% today, but will have to wait until the 31st to see the rest of that wish.
In reality, Ben should have done nothing. Gold, oil, and many other commodities are at record high. The Fed played politics and caved to the stock market. A recession is a healthy part of any economy and in a normal economy recessions are usually quick and only a bit painful. This is far from a normal economy. This Fed cut is not going to help in the long term. Yeah, it may allow for some refinancing of bad mortgages, but it's going to drive all commodities sky high; even higher than they are now and gold will be the biggest beneficiary. This was evidenced by the action today.
IMO, if Ben had done nothing, history would have viewed him as one of the better Fed Chiefs. I say this from talking to several people who were active when Paul Volcker was Fed Chairman. People hated him and were openly cursing him when he kept raising rates back in 1980. However, history now views him as the best Chairman in history. He put the country's long term health over the short term market action. The opposite is true of Easy Al or as I call him Elmer.
I arrived at the office at 7am today, about an hour earlier than usual as I was long too many gold stocks. My gold stock trading portfolio was worth about $100k, and I was looking at a $10k loss right off the bat. In my career I have never started a day off more than $2k in the hole. To say I was unhappy was an understatement. After the Fed cut, that loss was cut in half. I did not like the action after the cut, the S+P's went back to the lows and gold had gone to where it was before the cut. I dumped whatever I didn't have too much of a loss in. Yes, I know it was a dumb move, but when you trade on a daily basis, capital preservation comes first. Who knew where this market was going and I was not going to be a hero. To make a long story short, I bot back what I sold at higher prices, when it looked like gold was going to make a stand, and ended the day down less than 1% overall. I will take that. Also a big shout out to NEM for giving back it's gains from this morning and closing up a whopping .22! Thanks!!!! But kudos to AEM, ABX and GOLD for having great days.
As Sinclair has said, this is it. The game is on. Strap in and enjoy the ride. It will be bumpy at times but I think we are finally going to be rewarded. (Even though gold is trading down $3.50 now, I still think the Asian sessions just don't matter any more as Europe and NY dictate the action.)
It's sad when a person who has been dead wrong for over $100 and does not admit he is wrong and keeps trying to sell his story that the security in question is doomed for failure.
Yes, I am talking about your friend and mine, Guy Adami, who once again on Fast Money, bashed the hell out of gold, basically repeating what he has been saying all along: He knows the fundamental story(he doesn't), he knows the CB's are buying, BUT, he has seen this movie before and it will end bad, the miners take off their hedges at the top and put them on at the bottom. It sounds like a broken record.
Guy, I have said this before, how in the world were you ever a gold trader? This bull market is in it's sixth year. Yes, it has had it's drops and will continue to do so, that's the nature of the beast. But for six straight years gold has outperformed, well, almost everything. What movie have you seen before? This is not 1980 where gold spike $450 in five weeks, this is 2008, where inflation is running rampant, children run the Fed, and we are facing an economic meltdown on a daily basis. Please give us one fundamental reason why gold will be down. Please, just one. I beg you.
After the cut there were incredible reversals in all the European and Latin America stock exchanges and most of the Asian bourses are nicely higher. I have a feeling, barring any financial blowups, the markets might rally from here into the fed meeting. After that, all bets are off.
The ride is just beginning for real, strap in.
posted by Neal | 10:50 PM
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