Gold Upthrust, GDX Puts, and the “Scary” Stock Market “Crash” – Some Premarket Halloween Highlights from October 31

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? So now with gold……..

As far as the stock market rally today and some stock symbols……..

 

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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.

3 Comments

  1. I used to drink up the gold site hype that the USD was going to zero and gold therefore to the moon. With the bond bear you’ve shown us, the rising rates should make the USD go higher.

    But as the bond market starts losing it’s flight to safety status more money should flow into the metals on equity market selloffs. So ironically it appears to me gold will go up but with the USD going up instead of crashing. What do you think?

    • Generally yes Fave. Tho I do believe that each the bond yield goes to a higher high, the equity selloffs will only be about it getting acclimated to the new yields, those selloffs will be buying opportunities. And stocks and gold will rally together overall, the short-term stuff excluded.

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