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Tuesday, February 17, 2009

Exxon, Goldman: They Will Take the Market Down


Exxon Mobile: Breakdown?: Yup. You bet. This behemoth will suck the whole damn market down with it. Some support around $70... the NOTHING until about $62.

Goldman Sachs: This Pig too Will Fall: Today, down 11%. There could be support around $80... then NOTHING until about $65.

Ninjas love puts... that way if the powers that be suddenly change the rules (like randomly banning short selling) the risk is clearly defined.

5 comments:

Vijay said...

hey ben i'm looking forward to your update post on gold. It's get a serious bid right now.

Btw, checkout this awesome movie from the 80s. I just netflixed it (Rollover).

Rollover is apt. I think we're going to see a 5 handle in the next few months. All the Obama stimulus catalysts are going to be exhausted by then. The roaching is going to be vicious for the bulls.

Charts and Coffee said...

I mentioned the same thing in my post tonight about integrated oil. I went all out tonight in my "Gallery of Charts" post - http://chartsandcoffee.blogspot.com/2009/02/gallery-of-charts.html

Anonymous said...

Ben I am on your email list, and if ever I get to meet you, remind me to pay for dinner and the champagne ! Went short GS both shares and puts above $97.
Hate being "Anonymous", so I sign my name
Josh

Anonymous said...

Vijay, Ninja and others. This gold bull market is something I think I do know a little bit about.
Using TA is a waste of time. It will not be a market you can game. All you can do is ride the bull and sit tight, only adding on dips.
The point is the massive concentrated naked short position of all the banks that we know to be insolvent.
These banks over the years have borrowed gold from Central banks and have sold it, effecting the not so well known "gold carry trade ". They have bought treasuries in the process and have gone short the gold market. They have done very well by dumping gold and shorting the futures in the face of a bull market which has been going on for 8 years !But they are also sitting on a massive short position with the knowledge that the CBs will not call for their gold back. Until now maybe ! If this were to happen the banks would have to not only cover their massive shorts already under water, but also go to the physical market to re-acquire the gold that was sold previously. These banks have never had to put up margin for their short position and the CFTC has always looked the other way, like there is no way they would ever investigate JPM or GS for wrong doing. If you trust the regulators to do their job properly, that is naivety in the extreme !
The same thing goes for the silver market, and even more so !
The evidence right now that these banks are desperate to cover without blowing up the market, is in the fact that on COMEX, open interest has hardly gone up at all relative to this recent biggish rise in the POG and POS.
Both markets have the potential to do a Volkwagen at any moment. If you are long and are trying to finesse the market by trying to be clever, the chances are you will miss out on a huge move at the very moment it would really count.
Lastly it is important to buy the real thing. Never for a long term investment, buy an ETF in the hope that is a substitute. The ETF's prospecti are dodgy to say the least with no proper audit of the custodians and sub-custodians who also happen to be members of the concentrated shorts brigade. Last week GLD was supposed to have acquired 90 tons or so. Where from ???!!!@@@!! It is getting very hard to acquire physical gold of that amount without making serious waves. Yet the ETFs seem to do it all the time !
There has been a lot of skull-duggery going on in these markets, and there is a substantial risk of COMEX itself blowing up should these banks be unable to supply the gold or silver on a delivery month where there is a big demand for physical delivery. COMEX and the banks have always relied on the fact that most people close out their contracts without taking delivery. In fact they have gone out of their way to make taking delivery a real hassle if ever you try it. As this crisis moves on there will be more and more big buyers looking to COMEX to source their physical holdings, so the risk is real.
My very good advice to everyone is do not touch gold or silver ETFs with a barge pole !
At the end of the day, we could be facing total financial disintegration whereby we could be kissing goodbye to all forms of paper wealth including our trading accounts. There is no substitute for physical in your own possession
Josh

Robert E. said...

The Fed created this disaster. Time to put it out of it's misery and enable the government, as bad as it is, to take back the power of the purse. At least in that way, we have more say as to where the money goes, something we don't have in this fubar financial world run by banksters who have screwed the US taxpayer to the 9's for over 90 years.