October 31 Premarket

Wow I knew that Yellen was totally incompetent but she is worse than I figured. These idiots who are always telling us, the American taxpayers, that it is our fault for the govt deficit, and we need to RAISE taxes. They literally believe this. Never dawns on them it could be the SPENDING which is ONE HUNDRED % of the reason for the deficit. In all the time that the US govt deficit has been rising, decades, there is ONLY ONE CONSTANT – SOARING SPENDING. And taxes? Tax rates? They have gone up and gone down. Yet the deficit magically keeps going up even when they raise taxes. It is the SPENDING and when they raise taxes and more “revenue” (not revenue but this is how stupid they are in govt) comes in, guess what? They RAISE SPENDING even more. So this sets us up for the continuation and the future. Trump is never going to cut spending. So who cares that he’s cut taxes? It will not matter as far as the deficit. But whoever is after Trump, look out with the taxes. And yes my bond bearishness is 90% technical, but there is a fundamental background. And the people “hired” to fix the deficit fiasco, their IQs literally are too high plus they love the govt too much to ever even understand the SIMPLE cause of the problem. How many times have I said this, since first saying it WAY AHEAD of the crowd, 22 months ago in Dec 2016 –

IT IS A MASSIVE bear market in bonds”. Slowly the incompetents on Wall Street are figuring this out.

CNBC:

“The United States is taking on too much debt right now, a problem that is will only worsen moving forward, former Federal Reserve Chair Janet Yellen said Tuesday.

“If I had a magic wand, I would raise taxes and cut retirement spending,” Yellen told CNBC’s Steve Liesman at the Charles Schwab Impact conference in Washington, D.C., who characterized the U.S. debt path as “unsustainable.”

The U.S. fiscal deficit rose to $779 billion in fiscal 2018, up 17 percent from the previous fiscal year. This happened after President Donald Trump signed a bill late last year slashing the corporate tax rate to 21 percent from 35 percent. Spending levels climbed to their highest in six years while revenue only increased slightly.”

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Not sure who is more incompetent. Yellen or the gold permabulls. For years I have discussed, and pointed out why – WITH FACTS – that the moronic permabull talking point about how “gold soars when the stock market crashes” is 100% wrong. So again in real time in current times – I repeated it again several weeks ago with the stock market “crash” – “I do not want to see gold spike” – AND ADD OHS – I do not want to see an upthrust with the stock market selling”. Do you understand this – IT ADDED OHS. You have got to get a handle on OHS to succeed in this business. And I said with gold in the bigger picture that it always has a false bko first. And with miners I said on 10/12 that I am now long GDX puts and said –

Gold discussed yesterday, I am always concerned with false bkos with them, with miners, silver already had one false bko.”

To recap with GDX from last week. I REPEATED it – I am losing money on GDX puts – any one of you could have bought them cheaper than I:

Miners got clobbered yesterday. On October 12, then twice after, I discussed being long GDX puts – and being down on them. Any of you who read that could have bought those puts at a better/lower price than I did, with the GDX rally and some premium coming out of the options price. An upthrust potential in the $ approaching quickly.

October 12:

Gold discussed yesterday, I am always concerned with false bkos with them, with miners, silver already had one false bko. The miners the #1 group yesterday. I bought some puts, GDX options yesterday against part of a long position. Many months ago I discussed how August could set up the biggest low in miners since Jan 2016. And it would need to spend many weeks to set up very well. It’s been 2 months, much different situation than the low quality deal in the Dec 2016 low. A follow thru and weekly close above res/bko areas will mean it’s more likely I’m eating those puts. I do not feel comfortable with gold when it rallies as a “safe haven”.

October 23:

Silver needs a weekly close over 15 in the cash to set a very solid uptrend and really start the big-time short covering and new longs from the futures crowd. Gold has broken out, but I do not want to see an upthrust in it today. I left a chart last week in gold, did you study that?, it was pointing out something – the trend line with the volume associated with it and a 123 “top”, but did you notice the volume which was highlighted, that volume was seriously trending down, not how a 123 top sets up. I would like to see the volume, and trading action, stay relatively muted now. No emotional nonsense from the permabulls who always buy into strength. I am losing money on puts against some of my GDX position.

October 24:

Silver needs a weekly close over 15 in the cash to set a very solid uptrend and really start the big-time short covering and new longs from the futures crowd. Gold has broken out, but I do not want to see an upthrust in it today. I left a chart last week in gold, did you study that?, it was pointing out something – the trend line with the volume associated with it and a 123 “top”, but did you notice the volume which was highlighted, that volume was seriously trending down, not how a 123 top sets up. I would like to see the volume, and trading action, stay relatively muted now. No emotional nonsense from the permabulls who always buy into strength. I am losing money on puts against some of my GDX position.

 

Gold has gotten clobbered from the upthrust. As far as that stupid permabull theory – the stock market has “crashed”, that selling really kicked off on 10/11-12, gold surged, it is now BELOW the 10/11 close, even tho the stock market is well BELOW the 10/11 close also. Wow, what a great “hedge” gold is. The gold selling INDUSTRY is disgusting and fraudulent. And all the people who bought gold – BECAUSE of the stock market? The point also is that when gold is back into the old range area, it gets more interesting again (DXY chart below discussed last week). The incompetent buying because of the stock market is being wrung out.

 

 

You have got to be able to recognize the trend, in whatever time-frame you are trading, but remember the time-frames mesh together, context is vital in markets, it takes time to put together a way to work thru this, but remember – you must be able to recognize the trend, then certain tech actions occur – like reacc can only occur in an uptrend – if you can not see the trend, fine, do nothing until you can believe you have spotted it.

 

Yesterday with the SPY, regarding Monday’s late day rally, I discussed the “huge 5 minute volume off the lows”. Discussed in the chart below again. And some comments I made yesterday to a friend, and discussing my notations on a chart I sent about an SPY call trade I entered, chart below:

And it still needs to get thru and have a good close, change the character from the last 2 weeks.And even that is just part of this current move, more retesting after a solid rally and a real blast off day would solidify more. Look at waves on a 60 and start piecing them together. And yet understand how to use the 1 minute within it all. Because that is the actual trading chart.”

 

And downtrends, just looking for setups in reverse – mo push down, wait for the rally and the waves patience and take your shot on short side – the trend is the single most important thing to recognize:

 

 

I’ve discussed many times about the Russell want to see it lead, discussed it again yesterday in pm comments that the Russell is starting to lead, RS to SPY, relative to SPY highs and lows – with the nuance, you want it to show RS to SPY, at the spy low and the spy high, and break out first, or at least set up to bko first. And using the LHBL as markers, yet trying to anticipate a turn. The SPY yesterday first new rally day with the higher vol, Friday would be the first day for a follow thru as far as my other method goes, Friday also jobs day, could be interesting

This is not an official list, not time for that type of thing, just things I’ve been watching and honing, traded a few, several of them already broke out before I got a chance to post them, most of these discussed multiple times, DECK, BURL, WMT, BAND, LULU, FIVE, NEO, NIHD, ARRY, CRNT, CWST, IMMU.

 

 

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About traderscott 1097 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

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