Thoughts on Markets

Thursday, June 10, 2010

Ignore History to Your Failure - DOW Up - Precious Metals Down.

The DOW is up triple digits as this is written. This is likely to be another dead cat bounce, as the DOW is oversold at this point in the midst of an over all bear market. I am not buying in the general market and will be cautiously acquiring more miners as the prices dip. 

It could be a time for adding to miners, but when I do it, it will be again in smaller bites. I still like Fortuna, Hecla, and Silver Standard for my portfolios. I am looking at both DROOY and HMY as buys since they have been depressed by bad news from South Africa. 

The gold and silver EFTx could become good buys to me if their prices ever take a big dip.

I plan to do more charting later today and will try to report on the results tonight or tomorrow. For the time being, I am sitting tight with a good bit of cash ready for purchasing.

It is wonderful to rest in the fact that the Sovereign God of all, whether they believe it or not, is in control. Remember, people can and have rewritten history to exclude the centrality of God's church and His people. Rewriting does not change history, it simply changes the common perception of history in the minds of the gullible folks. 

It has been said that if one does not study and know accurate history, he is bound to repeat the mistakes of the past. Examine our government today for proof of this statement.

Whether one believes God or not has no impact on the fact that the Triune God is in control. He rules whether one believes it or not. However, whether one believes or not has a tremendous impact upon temporal life and the eternal life beyond the grave.

Belief gives life, and unbelief yields death. Think about it!


Market Overview: Treasury Yields, Housing, State of the Recession

US Treasuries are stable as supply test continues. Gold sets a new all time high at $1254.5, but resistances loom, while the euro stays above this week’s support at 1.1863. Crude oil remains range-bound between $67.15 and $75.72 per barrel. For stocks it’s the Power of the Pivots for the Dow, S&P 500 and NASDAQ, but the second leg of the multi-year bear market began with the April 26th highs.
US Treasury Yields –Yesterday’s 3-Year note auction was a success as the US Treasury sold $36 billion at 1.22% with the issue trading below that yield this morning. The bid to cover was strong at 3.23 times and the Indirect Bid was 47%, above my 30% to 40% neutral zone. Today the US Treasury auctions $21 billion reopening of last month’s 10-Year note with today’s support at 3.305 and weekly resistance at 3.010. Right after today’s auction we will read the Fed’s Beige Book for the June 22-23 FOMC meeting. Tomorrow the US Treasury auctions $13 billion 30-Year bonds. Read it HERE.


50 Statistics About The U.S. Economy That Are Almost Too Crazy To Believe Published on 06-03-2010

By Michael Snyder - BLN Contributing Writer
Most Americans know that the U.S. economy is in bad shape, but what most Americans don't know is how truly desperate the financial situation of the United States really is.  The truth is that what we are experiencing is not simply a "downturn" or a "recession".  What we are witnessing is the beginning of the end for the greatest economic machine that the world has ever seen.  Our greed and our debt are literally eating our economy alive.  Total government, corporate and personal debt has now reached 360 percent of GDP, which is far higher than it ever reached during the Great Depression era.  We have nearly totally dismantled our once colossal manufacturing base, we have shipped millions upon millions of middle class jobs overseas, we have lived far beyond our means for decades and we have created the biggest debt bubble in the history of the world.  A great day of financial reckoning is fast approaching, and the vast majority of Americans are totally oblivious. Read it HERE.


Steve Wynn Takes On Washington

Steve Wynn is one of the most successful entrepreneur in Las Vegas and other places. He has built some of the more attractive and innovative buildings in Las Vegas and now in Macao. Virtually everything he built was a success. His talk does not provide solutions, but does focus on the problems in Washington.  See the Video HERE.


European gold demand - Bernhard Schnellmann: Director for Precious Metals Services - Argor-Heraeus
"we see a huge demand for smaller denominations, starting actually from something like 10 grams, 20 grams, one ounce up to 100 gram and most of it is demand coming from all over Europe"

Read the article and hear the audio interview HERE.


Why no price is too high for gold

During a week when almost everything went wrong, the gold market went very right. In fact, gold has been going very right for more than a decade. The gold price has more than quadrupled during the last ten years. So is it too late to buy the stuff?
My short answer is, "No."
Read it HERE.


Europe Looks to Break US Ratings Monopoly
By Beat Balzli

Few doubt that US ratings agencies contributed greatly to the global financial crisis. Europe is now worried that the euro could also fall victim to credit downgrades -- and is exploring the possibility of creating its own ratings agency.
People like Brian Coulton aren't exactly the most popular figures in the financial industry these days. Politicians, in particular, aren't particularly keen on him and his ilk either. Coulton, the European chief analyst for the ratings agency Fitch, was largely responsible for the downgrading of Spain's credit rating late last month. It was a move that once again sent stocks tumbling in New York and the euro down against the dollar.

Coulton doesn't accept any of the blame. "We performed our assessment, and that's it," he said tersely. The reason for the downgrade, he added, is concern that the austerity program announced by Spanish Prime Minister José Luis Rodríguez Zapatero on the previous Thursday would throttle economic growth. He declined to comment further. Read it HERE.


Gold-Coin Haven Demand Saps Supply, Raises Premiums

June 9 (Bloomberg) -- Demand for gold coins is tightening supplies and boosting premiums as mounting concern over Europe’s debt crisis and a proposed increase in U.K. capital-gains tax spur purchases, according to GoldCore Ltd. Read it HERE


Gold Running in Short Supply

EJ: You've made a point that the Canadian government sold all its physical gold a few years ago at market lows. Which countries are best positioned in terms of owning gold?

ES: I would guess Switzerland, Germany, France, and possibly Italy are good, in terms of having gold. I haven't checked the data. Russia's coming on. China's trying to accumulate gold, but per capita, they don't have much.

We all debate whether the U.S. has their gold. That's the real debate. Was the physical gold supplied by the central bank surreptitiously? That's the question that nobody has the answer to. But, when you realize that all this new demand should not have been easy to supply, I wonder who is selling the gold.  Read it HERE.

From Ed Steer's Gold and Silver Daily: "Gold didn't do much yesterday... nor did silver.  It was, as Ted Butler keeps saying, just another day off the calendar.  What happens from here is anyone's guess.  I can give you a couple of excellent reasons why the price of both gold and silver may go in either direction.  Here's a reason why the price of gold may decline [taking silver with it] in the very short term.

The bullion banks are still massively short gold... 26.8 million ounces as of the cut-off for last Tuesday's Commitment of Traders report.  If the bullion banks decided to pull the pin... the down-side potential may be considerable.  The critical 50-day moving average sits at $1,182... with the 200-day moving average at $1,110.  Just touching those moving averages would drop the gold price by around $40 and $120 respectively.  Will it happen?  Don't know.

But, if it does happen, I expect that the silver price would be taken down as well... as this is the critical metal for these same bullion banks. I don't expect the price to remain at those low levels for very long, either.  And I'm still 'all in'... regardless of what words I write here."

There are very suspicious moves of the prices. I believe these are due to capping. Then there is one spike upward which is also suspicious. Here are the 24 hour metals.


Miners from

Currencies from

Here are some prices: BYDDF 7.78; FVITF 1.94; TLT 97.20; TBT 39.14; DOW up 219.50 to 10119; Silver up 0.14 to 18.25; Gold down 14.30 to 1218.80.

Best to each, Doug


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