Disclaimer

I will not be responsible for any material that is found on this site or at the end of links that I may post on this blog site. Mistakes may happen from time to time. URLS and domains may change hands. If you need financial advice or someone to hold your hand while you make the trade, please find another site.

Because the information on this blog are based on my personal opinion and gosh I am so fucking opinionated, it should NOT be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional, preferably both and in that order. My thoughts and opinions will also change from time to time as I learn and accumulate more knowledge,or my meds wear out, or my post coital euphoria passes.

Feel free to comment on my ideas or ask questions in the comments section for the blog entries. Please remember that this is a blog, and you do not need to agree with everything or anything I write (except I am very needy when it comes to my looks...so you have to say nice things). I reserve the right to delete any comment for any reason (abusive, profane, rude, etc.) so please keep the comments polite, unless you are criticising Gold Bugs...in which case go wild....doggie style.

This site is also dedicated to preventing small traders from having their accounts go supernova by listening to Gary Savage. To read more about him, please browse through the posts and also see http://smartmoneytrackerpremium-exposed.com/


Wednesday, February 15, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 3



Previous Parts can be read from the archives.
11) Inflationary shock in 2014? The year the price of oil collapsed and the USD went up?
12) The article related to this calls for $160 oil in 2014. Pretty close. 
13) All time highs for Gold. 
 For context, that (Oct 2012) was the last chance to get out.

 14) Got dandruff? There is a head and shoulders top for that. USD was bottoming around then. 
15) Gold price is not being suppressed.

Please don't confuse him with this guy who does not know how to trade, and more precisely, how to trade managed markets.


Update:

Gary just put this up:
Linked to this chart



Gary's you little despicable fuck. You are so beyond pathetic that I actually feel sorry for you.
Here is when I put up that ratio bet.



Do you see how GDX:XLE has done since Dickwad?

But wait...It gets better.
Posted here in real time every trade...resulted in me going Long GDX, when Gary is showing me as short the sector.





Tuesday, February 14, 2017

Blaming the Fed/PPT for your short-sightedness


I found this absolutely fantastic piece of data, which shows the breakdown of returns in the largest bull markets. It shows how much the 5 different areas contributed to the total returns.

Some conclusions.
1)    Of the 9 largest bull markets including the current, 6 have had LOWER earnings growth than current. Meaning we had 6 bull markets where earnings increase were actually lower the current and contributed less to the total return.  Again, a stark reminder to all those believe the Fed has “managed” this market, that bull markets regularly occur with lower GDP/Earnings growth than we have had. 
2)    Dividend Yield, Valuation expansion and Inflation are middle of the pack.
3)    Valuation normalization was the second largest among the 9. That means that Stocks at March 2009 were second cheapest ever and hence normalization contributed so much.
4)    There is nothing unusual about this bull market except a giant ass fucking bubble in fear and pessimism perpetuated by sites like King World News, Zerohedge and the Looney tunes “System will collapse” idiots.

Full article can be read here

Sunday, February 12, 2017

Futures: Part 1 :Roll and decay

Contango, Futures roll, Backwardation and Futures vs present prices is a large topic. Hence I am going to try and do it piecemeal.
Here goes.
Futures represent delivery of a certain product that is very specifically defined by the exchanges in terms of grade, location and quality on a certain date (date range).The buyer agrees to buy and the seller agrees to sell it. Another price is the Spot price which is the “current” price for the same item.
Many factors impact the futures price for the closest month vs the futures price of other months. A few of them are
1)    Storage Costs for the commodity
2)    Expected changes in supply and demand in the future
3)    Storage limitations
4)    Interest rates
5)    Short term disruptions in supply and demand.
6)    Harvest times for Ags (Corn, Soybean, Rough RIce etc.)
7)    Potential current or future substitute availability
8)    Producer and Consumer hedging
9)    Central bank manipulation (just kidding J)


Let’s look at a simple fictitious curve of oil from May 2017 to February 2018. Assume currently it is March 2017 and May 2017 is the first available contract, which trades at $45. The cost of storing 1 barrel of oil for 1 month is $1. In the perfect example, the only thing influencing the price of oil is the cost of storage. Hence each month is higher than the next by about $1. 




Let’s say you were a big time speculator and you had $54,000,000 to invest. You look at the curve and decide to buy 1,200 contracts of WTI (1,200 X $45 X 1,000 Barrels per contract) = $54,000,000. We are going to ignore the small commissions. Also because you hate to take leverage, you have the entire amount in cash in your account. Now you are the proud owner of 1,200,000 barrels of oil to be delivered in May.

As the end of the futures contract comes about, (late April), you look at the futures curve and lo and behold, the curve has not moved one bit in this ideal example.  You know you obviously don’t want delivery, so you sell your May contracts and buy June contracts. However when you do this, you just get 1174 contracts for the same amount as the price is higher ($54,000,000/46/1000 barrels).

The Futures curve stays perfectly flat as all of OPEC is frozen in time. Every month you roll your futures forward. By the time you own February 2018 futures, you own 1,000 contracts at $54 vs the initial 1,200 at $45.

Let’s stop here for a minute. During our little exercise spanning 9 months….the price went from $45 to $54, a nice 20% increase. You made 0%. So we see the first example of rolling hurting your returns. The reason is that when you started speculating $54 “was baked into the futures” . In fact you would have done just as badly, if you bought 1,000 contracts of the Feb 2018 futures right at the beginning and held them.

You are feeling pretty silly now, but life throws another curve ball. Just as you are about to roll again, a huge amount of oil is sold from the strategic petroleum reserve unexpectedly. The price drops to $45 within seconds. So here is the other way you lose. You started off with the price at $45 and ended with the price at $45. In an ideal world you should have not lost anything. But you are going to be down 16.67% on your investment as now your $54,000,000 investment is worth $45,000,000.  


To be continued……



Thursday, February 9, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 2

Mea Culpa for not going far back enough when I started on this.
It seems Gary had some priceless nuggets of wisdom in his oldest archives. Continuing with the 60 examples.

6) Final top in (Bonds) ….in March 2010. Please keep that in mind in light of his recent black swan call. He was at least 7 years early.





7) Gary making fun of people who believe in manipulation. Yep. That happened. 





8) Recession in 2011. Third leg of secular bear market. Fascinating call.




9) Folks, let me tell you that this one is a classic.



10) “Smartmoney” was running out of the stock market and probably accumulating 3X funds. They tend to be a decade or so early….but hey that is the price of being smart. 


Tuesday, February 7, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 1

How to lose your account in 60 trades
  5 (21%)

Balls of Titanium
  6 (26%)

Baby Bull: How one man spotted 60 of the last zero bull markets
  10 (43%)

Quest for 1 trillion: 4 GDX calls at a time
  2 (8%)


The winning name for our contest name for Gary's book/newsletter as above…. albeit Von Burger had some phenomenal ones which were not included but made me eject my coffee through my nostrils. You owe me a latte dude.

As always to give the people what they want….the next few posts will be titled as the winning entry, with me actually digging up 60 examples of Gary’s genius.

Starting from Feb 2012 

1) Possible USD currency crisis and parabolic move in CRB in 2014











2) March 2012: Gold going to.......sorry I cannot read that.... 90!!!!!!!????  NO wait that is the RSI. Gary is this a log scale above the 1,900? Looks like a log scale...so $19,000 by 2015? Just a 95% miss no biggie. 


And USD going to -25...oh fuck that is the MACD. Is THIS a log scale, Gary?















3) June 2012: Same Shit....but a bit more radical ascent for the CRB. Even the last part of the 2008 run cannot match Gary's vertical ascent prediction. 










4) July 2012: When Gold "had bottomed" and was on it's way to test $1,900.  This unhealthy obsession with burritos has been pretty longstanding from the looks of it.....but I am guessing he lost all the bets and did not pay up.














5) Aug 2012: Fortunately here Gary found the chart vertical length suffice to make his point and did not start running into the indicators.....for that I am grateful. So SPX 650 by 2016? What's 1500 points between friends?



Much more to come in future parts

Saturday, February 4, 2017

Boom or Bust?

A regular topic of contention is whether the economy is booming and hence the stock market is justified, or is it in shambles and the stock market is a casino waiting to crash.

Here are few arguments stated earlier. If MM has another reply, I will add it below the last pic.








Oh yeah, forgot in my response….totally agree on the “Fuck Gary” part. 

Tuesday, January 31, 2017

Gold outlook


I must say that I am extremely hesitant giving a Gold forecast. The fact is that I have not had a losing trade on the precious metals for over 9 months and the longer this goes on, the more likely I will be spectacularly wrong.  Add to that many smarties, including one sharp-shooter I know personally, are taking the opposite side of what I feel, makes me very uncomfortable.
With that caveat, let’s look at the evidence.

Pros for the bull market.

1)    The USD has peaked. I called the USD top a couple of weeks back and I think  it will be one for at least another 8-10 weeks. It could also most likely be a major, major top. Full Disclosure: Long GBP/USD since 1.21. It is hard to imagine a major move down in Gold in the face of USD weakness, at least in USD terms.
2)    The sentiment levels at the $1,125 bottom reached some of the most extremes of pessimism. Those have historically marked major bottoms.
3)  TLT-USD/JPY-Gold correlation is still running high and the smart money is very bullish on bonds. If the correlation continues, Gold and TLT could make a big move up together.

Pros for the bear market.

1)  COT sentiment never reached the depths of despair that we see at major bottoms. The relentless buying in silver futures in the face of silver weakness is also quite unusual.
2)   I have a few indicators that I do not share, and unfortunately you can take this for what is worth….they are still warning me that big slide is likely ahead.
3)    Gold is so expensive relative to every commodity that I think a massive bear market in Gold relative to other commodities is overdue.
Gold vs Platinum: Full disclosure: I am long PPLT short GLD for 10% of my portfolio.






This is Gold versus commodities. Looks like Gold is severely oversold, but if the 2016 high was the final top Gold has a lot of room to fall versus commodities.



And my favourite, the Gold: oil ratio which has averaged 15 since 1972 (after gold price was unfixed). I think this is due for a mean reversion to 12 and I just cannot see oil breaking $70 in the next 12 months. Yeah that means a $840 Gold to me. However, a case could be made that as we move away from fossil fuels, Gold could get permanently revalued higher against oil. I don't think we are there yet, but if that happened, Gold: Oil could permanently find a new floor at 20. 


To me the weight of the evidence paints me moderately bearish. But I have no positions except the Platinum Long versus Gold Short and a very tiny position short NUGT Feb calls.

Monday, January 30, 2017

Manipulation: Part 2

Repeating the examples of Part 1 with my take.

1) The Federal Reserve cuts interest rates and promises to keep them low to “calm” Bond investors.  (Bonds, Stocks) &
2) The Federal Reserve/BOJ promises to buy X amount of bonds and common shares per year for 3 years at least  (Bonds, Stocks)

A large percentage of the investing community see this as "artificially" suppressing interest rates and boosting demand for stocks. I have to disagree. While the Fed can control the short term rates, the long term rates have a mind of their own. In fact, every round of QE announcement and follow through has seen long term interest rates rise/stay flat (TLT go lower/stay flat) while withdrawal of QE has caused interest rates to fall (TLT to go up). So how the fuck can the Fed be influencing stock prices by QE when they cannot attain their primary end point?


3) OPEC cuts oil supply to increase the price (Oil).

As the producer of that commodity they have the right to set the price. We have no right to insist they blow up their budgets, run the risk of hyperinflation (Venezuela is already there) so that we can make an extra hiking trip in our inefficient SUVs. 

4) UBS sells stocks from its own inventory during a panic to trigger stop-losses on its customers, in order to purchase them back lower (Stocks)

Stop-loss triggering is used by every professional trader/bank since stop losses became available. If you don't want to be screwed, use mental stops away from common support zones or use options. If you don't like it go play Nintendo, don't play with the big boys. 

5) Between 2004-2010 Goldman Sachs fixes the daily Libor rate 1 basis point lower than it actually would have by selling a large amount of a Libor product to a pre-agreed colluding bank on close. It would only impact products that trade of Libor rate close and not influence any daily trading nor the long term movement of Libor. During this time Libor rose 300 basis points and then back down 300 basis points. (Libor rate)

This is a really good example. Because first it is manipulation and Goldman Sachs should have their balls cut off for robbing people. It also shows that over the long run they have no influence on the direction of Libor rates. Same as for Gold and Silver. They can cause selloffs (similar to example 4 above) but Gold price rose 700% in the 10 year period from 2001-2011. Silver rose 900% trough to peak. That is a massive failure for someone short. Here is another point, If the big banks were consistently short about 400,000 contracts during the bull run...with no counter hedge.....they would be short 40 Million ounces of Gold. That means trough to peak they would have lost 70 Billion. A bit hard to hide.  

6) US Shale producers differ drilling unprofitable wells to help increase price of oil (Oil)

No different than 3 but if you listen to the news channel, Shale producers are somehow are "good" and OPEC somehow "bad".

7) OPEC agrees to keep over producing to bankrupt US shale with the idea of reducing production to bring prices over $200 in 3 years. (Oil)

This pricing out of competitors has been used in every industry in the last 200 years around the world. Depending on exactly how it is done, it may be illegal in some countries. 

8) Home Depot gets its major shareholders to agree not to sell any stock for 3 years…promising a large expense cut, large dividend increase and offer to buy 30% of remaining outstanding stock. Stock increases 100% with 1 year as shorts scramble for cover (HD stock).

Perfectly valid tactic. In fact, part of the reason stocks have gone up so much is due to the buybacks by the S and P 500 companies over the last 8 years. 

9) US Shale producers hedge 80% of their oil production for 1 year by shorting 500,000 contracts (worth 27.5 Billion) of oil futures as prices briefly touch $55. Prices remain depressed for some time (Oil)

This has actually happened. The producers are hedging major amounts and this will likely keep a lid on prices. So the producers (in this case oil) are the commercials on the COT, and they have been so badly burnt that when they once thought anything under $90 was a bad price, now think $55 is a great price. Their hedging is depressing prices and the dollar amount is higher than Gold shorting, yet this is rarely compared to Gold shorting. 

Wednesday, January 25, 2017

Still falling for you (r bullshit) Gary Savage

Manipulation Part 2 will be delayed as we had to bring you this more urgently.


So we have a charlatan who claims his “Model portfolio” is up 150%. I had my doubts. So I subscribed just to see what the fuck was going on.

Below was the second entry point of our genius. JNUG was at $23 at the time on August 31st. Note he had already committed 50% at higher prices. 

  

What followed was absolutely awful. Gold smashed through $1,275 and JNUG was down 40% in a flash. Did Gary sell? He found it hard to believe that many on his blog including me, got this right. He also found it hard to sell. In fact he was ready to back up the truck and advised never, never to sell into an oversold market. 




Some relevant comments from the discussion.



At this point with JNUG around $12, model portfolio was already down to a small 25% gain. This was the same model portfolio that had been blown to zero multiple times before. 3 days later he was totally convinced the bottom as in.




Even telling this poor soul who was down $90,000 that he should not sell.





While his subs were devastated, Gary's pie in the sky targets continued. He added three more "buys" over the next few days.





 But one sub stated the whole truth. "RESET THE MODEL PORTFOLIO BACK TO 100"




But Gary kept adding “buys" and more fanciful ideas to keeps subs on the losing trade. 






Even from $12, JNUG suffered another 70% loss before bottoming so Gary's refusal to give up on 3X ETFs had some bad results. Further, he added that Gold was going to test the highs in the next daily cycle and exceed $1,400 by November 13th or so. 






Finally, Gary did what all men of his low calibre do when faced with a large mess of their own doing. He blamed someone else and HE TERMINATED the MODEL PORTFOLIO. 





This is classic Gary. 

1) There is no natural scenario where Gold suffers repeated premarket attacks to cap price below $1,275 (so your trading only works when there is no manipulation which you repeatedly have said plagues the Gold market?)

2) There is no natural scenario where a daily gold cycle tops on day 2 (yeah there is you fuck, it is when you get the count wrong)

3) I just have no idea how to trade (Just stop right there Gary. You nailed it!!!!!!!!!!!!!!).

But Gary was not done in his Squirrel Pant Pressing land.....His Model portfolio was still up 54%!!! This was astonishing to say the least as someone else had confirmed that it was down to 25% at much higher prices for JNUG. Regardless he terminated the model portfolio. From here on out he was not going to use the Model Portfolio. 

About a month later. 





AND we are back!!!!!!!!!!! In fact the very first comment brought this up, but Gary dodged the question. Mind you Gary would have to close his old trades likely bringing his "Model portfolio" down by 90% but he just glazed over this and closed his portfolio on a day the markets were closed. My friend, I would like you to realize that people cannot close out real world positions on holidays. 




Regardless, JNUG was closed at an 80% (from $22.5 to $4.5) loss somewhere between December 22 and December 27.



Gary Savage/Toby Connor, you keep fucking up....so as Ellie Goulding would ask...(Why are your subs) Still falling for you?