JWU DEC 13

Dec 13, 2013

 

1.   "Now if money suddenly got velocity, if people began to lend and spend, the Fed would be very, very hard put. … If money got velocity, I would think you would see things begin to turn topsy-turvy. They would taper at the speed of sound." – Art Cashin, UBS Director of NYSE Floor Operations, Dec 13, 2013.

2.   I’ve really pressed the importance of money velocity as part of the upcoming taper-to-zero package, and in the potential rise of gold in 2014.  QE is inflationary, but each individual QE case is different.  When that QE becomes inflationary, and how it does, can vary tremendously.

3.   I’ve also told you to expect the few small “taper is bullish for gold” voices in the wilderness (one in the gold community; me) to become an army as 2014 rolls on. 

4.   Money velocity is what will bring that army forwards.  The Dow is likely to react fairly positively to a taper that is accelerated based on money velocity action. 

5.   It’s a little more uncertain, to put it mildly, how the Dow would act on accelerated money velocity with accelerated corporate revenue growth and falling profits.

6.   Even more uncertain, and potentially a Dow death knell, is how money managers would react around the start of 2014 crash season (Aug-Sept 2014) if Japan was showing significant inflation.  My guess is those who own gold would be in a fairly comfortable position.

7.   Let’s take a moment now, rather than staring at today’s GDXJ non-action and crying, and salute RBC analyst George Gero for joining the “In 2014 gold does well” roster of champions.  George specializes in spread trading gold against interest rates and he expects 2014 to bring a revival of that trade.

8.   Please click here now.  That’s the 60 minute bitcoins chart.  For public realm charts (stocks, bonds, commods, etc) I like the stokeillator (14,7,7 series) only on the daily chart.

9.   On the 60 minute charts, I like to run the 14,3,3 series.  For the private money bitcoin chart, the 14,7,7 series seems to work pretty well.

10.            Repetition builds wealth, so let me repeat: The bitcoin pgen I like is buying every $25 down, selling every $50 - $100 higher (ave $75), and buying larger at each $100 round number on declines.

11.            I’d suggest selling about 30{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} of the round number position on a $200 - $400 price gain.

12.            I run more aggressive bit coin trading action myself, working around moving averages.  Not crossovers.  I like to buy when price moves a certain distance below a moving average, and sell as it rise back to it, or above it.

13.            I’ll post a bitcoins trading action video on the site tomorrow, hopefully, covering the moving average tactics.

14.            Please click here now.  You are viewing the uranium chart, and yes I’ve rang the cash register into pretty much the tick highs. 

15.            I tried to pgen rebuy $5.25 but I never got filled, although I did in the $5.35 area.  That’s part of market life; it’s imperfect.

16.            I showed the GU subs a quarterly bars chart today, and showed how markets can flash technical signals like non-confirmations that last not just for years, but for many decades.

17.             Some of you have asked about stocks like Jaguar recently.  Will they survive?  I don’t think that’s the right question to ask in regards to junior stocks.

18.            The right question to ask is have you allocated risk capital to the stock professionally, both in total size of capital and pgen zones?

19.            If you approach a junior resource (ultra-high risk) stock with the wrong tactics, and then realize it, my view is that you are better to approach another one more professionally, rather than try to average down on the one you over-allocated to at too high prices.

20.             You should feel somewhat comfortable in the market at all times.  When I allocated capital to Dow stocks in 2008-2009, that was probably my most horrifying time emotionally.  I had no problem buying to zero, but I did have a horrific feeling that the system was going to implode as one otc derivative after another blew up.

21.            The Dow going to 500 or 1000 was not a problem for me, and I knew it could go off the board if it went low enough. 

22.            The idea that the Dow was going off the board at 6500 was just mind boggling, and it almost really happened. 

23.            For YOU, it’s part of the game that all your junior gold stocks have a high chance of going off the board.  Try to decide how much capital/business cash flow to allocate to your pgens before your first buy order, rather than rushing in to average down on them when they plunge shockingly lower.

 

Gridtime!  Try not to overthink here.  The banksters have run a lot of scams, in a lot of ways, for a long long time.  That’s what they do, and that’s who they are.  Whether it was the 2007 removal of the uptick rule in 2007… whether it was the naked shorting shell game… 2014 is a new year, and they’ll have new games.  If the game is money velocity, lowered demand for dollars, and reflation, and I’m reasonably sure it is, the gold stocks could perform like Bank America did out of the 2009 hole.  Don’t expect gold stocks to start rocketing on Day 1 of the taper.  They might rocket, they might do nothing, or they might fall.  Just keep your eye on the money velocity ball.  As it starts to roll faster, you’ll seen institutions respond differently to gold on jobs reports day and on other key reports days than they have in the past.

 

Thanks!

           Cheers

           St

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