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Monday, October 22, 2018

THE NEW GOLD VIGILANTES

“In a messed up world, finding happiness is what matters!”

“But I don’t want to go among mad people," Alice remarked.
"Oh, you can’t help that," said the Cat: "we’re all mad here. I’m mad. You’re 
mad."
"How do you know I’m mad?" said Alice.
"You must be," said the Cat, "or you wouldn’t have come here.”
― Lewis Carroll, ‘Alice in Wonderland’

I asked the question last week, and it’s not of a rhetorical nature; “what 
happens when a couple of billion Chinese, who by the way lately have seen 
1) domestic real estate crumble and/or collapse, 2) stocks crater, and 3) their 
currency the Yuan down 15% this year alone … figure out gold is the only asset 
class to be in to truly protect themselves, and then proceed to literally gobble up 
every “Hoover Dam” ounce they can get their hands on”?
  
For most of the world, financial “happiness” starts with financial assets that are 
stable, and can be counted on to rise in value over time … the Chinese have 
gotten “swindled” in real estate scams, found out magical Chinese stocks can go 
down, stay down, and go lower still, and lastly their fiat currency is
 depreciating faster than ice cream in summer … meet the “new” gold 
vigilantes!

Cuz I got news for the central bankers of the world, and those sell side 
manipulator banks, when it comes to gold; “when the tide starts rising again, 
you won’t have the ability to stop it … too many people, and too much money, 
overwhelming your asses no matter what you say or do … and I don’t think it’s 
gonna take much time to convince the smart ones, that in the very near future, 
the money to be made is on the buy side of manipulation … and for the Chinese, 
they’ll be like Hobbes above, rolling around the sunny field sleeping with a smile 
on their face … and the rest of the world? … an entire generation of “investors” 
and/or traders genuinely think stocks can’t go lower cuz of the FED “put”, and 
are being set up like no generation before … the massacre in stocks, when it 
comes, will unleash gold like never before, but the problem is there isn’t nearly 
enough gold to satisfy exploding demand, especially when you get to bid against 
a group of people that have been lied to and cheated, and number in the billions 
… the old “drivers” of price will be “dust in the wind”, and to most people this 
insatiable demand will seem “mad” … well, we all wouldn’t be here if we weren’t 
mad with ‘em”!

Overnight, on the Asian open, we saw the usual gaggle of panic buyers, that 
briefly sent price to the 1230 level, but as happens so often, Mrs. Wantanabe 
& Gal Pals bought the high, and since then it’s been a steady trip lower 
… New York actually looks like it’s gonna start the session threatening a new 
low for the day … too early to tell yet, but if that’s the case, sell stops under 
1220 - 1218 should make it interesting to say the least.

As ZH points out over the weekend, gold has seen the quickest turnaround in 
retail spec sentiment ever seen since 1999… from short position levels not seen 
since 2001, to being aggregate long over 40,000 futures contracts … in just a 
few weeks! “Just the kind of news you’d expect, if in fact, today sees some kind 
of rout on the downside”. The link directly below.

squeeze-1999-specs-abandon-vix-selling-spree

Turning to today’s gold market … finally, an attempt to break lower … not 
sure if there’s any “legs” to this, but at a minimum I would expect to see some 
sell stops set off … we’ll see, as this Monday is starting off like wet toast 
“nothing to see here Sheeple, move along”.

“Traders reaction to gold today”!

Seven [7] hours into today, and we don’t even have a $3 range … won’t rally, 
won’t break, just sitting doing almost nothing. Not going to trade this horseshit 
when conditions are this bad, and make no mistake this is bad … not sure what 
to make of this “no action”, but I do think there are subtle changes happening 
around the world that are uber bullish for gold … sometimes they take time to 
manifest themselves … since the big stock market sell off on October 11th, gold 
has seen almost no “sell action” of any significance … sure, the superficial  
“couple of bucks” selling that is part of the ebb & flow of trading, but I mean 
no concerted effort to take it lower by the metals dealers … I will repeat again; 
“at some point here, and I’m thinking a lot sooner rather than later, when do 
bullion banks come to the realization that manipulating gold from the buy side 
will make more money than attempting to suppress price via selling for central 
banks? Cuz when that happens, and the Chinese join the fray, look the fuck out 
on the upside”!

Maybe it’s the upcoming midterm elections, maybe it’s world events swirling 
around, maybe it’s just one of those slow periods gold experiences now and 
then … dunno … what I do know, is it can’t be traded successfully when there 
is no volume, no price movement, and zero liquidity, and all it does is “chop”  
back & forth … try to play the “chop” and you get caught, with no way to make 
a penny back when you’re wrong … our proprietary “volatility heat map” is the 
lowest I’ve seen it since we started to trade gold, and what that means is that 
there’s nothing here.

Quite frankly, while Mondays can be slow, today makes slow look like it’s 
running … this really is one of the worst trading days I’ve ever seen here 
recently in gold … no way to sugarcoat this or attempt to say it’s just “choppy” 
… no, this is simply pure shit.

For those subscribed to our C2 gold futures signal service, rest assured I’m not 
going to allow you to pay for trading signals that don’t exist … “if, during ANY 
month, I feel like the market is “letting us down” by being very slow, I’ll issue 
coupons to subscribers they can use to get the next month free … I’m not going to 
do “stupid shit” and trade for the sake of trading; that’s idiotic … so for those 
wondering what’s gonna happen if the metals markets refuse to move, and we just 
sit here watching grass grow, I’m telling everyone now, I’ve got you covered! 
… we aren’t going to charge people when gold crawls and there’s nothing to do 
… and right now, we’re getting real close to issuing free coupons, cuz for the last 
week gold has … sucked! … really pathetic ranges in New York, and trading 
action that is right behind … in any event, for our “SUBS”, I got your back”!

Calling it quits here at 2 PM EST … so, we end the day in New York a 
complete waste of time … tip to tip during 7 hours about a $4 range, with 90% 
of that time between 1221 - 1223 … it is what it is, and there’s nothing I nor 
anybody else can do about it … we just patiently await better conditions. No 
trades today in the C2 signals or in the PAMM … quite frankly, nothing to do 
in a D.E.A.D. market.

Onto tomorrow and hopefully some trades to make … until tomorrow mi 
amigos … Onward & Upward!!

PAMM Spreadsheet directly below.

click to enlarge

Have a great day everybody!!

-vegas

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