Wacked Wednesday? (updated)

3:46 am (Hawaii) Didn't like my trades yesterday. Liked the market whiplash even less. Aimless but I got myself stuck in that merciless washing machine. This time, the market shows direction (down) and I'm back in with FAZ (at 26.78) and TVIX (at 8.48). The TVIX position is quite small this time, meaning I can withstand a 2% or 3% drop. Stop losses, as always, are in place.

Why the drop in indices today (1% to 1.3%)? China says no stimulus, serious stimulus is coming. Is this really news? No. But volume is in this negative market today.

Update 3:56 am A wtf moment indeed. FAZ dipped to 26.69 and stopped me out. But TVIX went even more dippy down to 8.45 and stopped me out. It touched 8.45 for a few seconds and ran back up to 8.55. In other words, they played me and my stop loss orders. I'm at a net loss (very small) but it sucks that I was up (small) for the past 25 minutes or so and got suckered. Yeah. Note to self, no stop losses on TVIX from now on.

Update 11:08 am Woke up about 25 minutes ago to see the Dow closed -160. Indices were off by 1 to 1.4%. But the move in financials, FAZ, TVIX are major. My entire Debt Spiral list is red with big losses today. FAZ fell to 26.99, then ran into the close and is at 27.55 after hours. In other words, I would've had a winning trade if I'd stayed in. (I wouldn't have held all the way down below 27, but I could've started a new position in that area.)

TVIX, which I bought early today at 8.48, dipped to 8.32 by 2 pm Eastern time before running hard. TVIX was at 9.10 after hours and is now at 8.94. I traded in and out of FAZ and TVIX with zero success today. Time to change strategy. I had the right picks, but the wrong timing.

It's unpredictable even though so many bloggers and analysts claim it is not. Sure there's a bounce ahead, but when? Nobody really knows anything except that when it bounces, it will be big. Until then, the dollar keeps rising, the euro keeps dropping (below 1.24) and my timing needs to be better.

Oddly enough, AAPL ran to 579.99 before cutting back to 578.10 after hours, up 1% for the day. @TraderFlorida, as usual, is dead on about AAPL's bounce. His call was bullish if AAPL gets above 576 on big volume. Today's volume, 13.4M shares, is a bit more than Monday and Tuesday levels, but not close to last week's numbers (22M+).

AAPL up, Apple plays down

Duh-duh-duh-dollar?

12:54 am (Hawaii) Clive Maund sees silver on the verge of a plunge, though he offers nothing beyond technicals. Good enough for him, not for me. I'm not touching paper silver here, but I am watching for a dip. But Maund has already echoed what a lot of people expected with a decline in the Euro: a rise in the US Dollar. If that means, as he predicts, a rise in Treasuries, that fits the recipe, doesn't it? After all, Obama is long Treasuries.

Might take a closer look at UUP (long dollar ETF) this week for a brief, quick trade, though I still lean toward FAZ long term. No positions, all cash, but watching.

What's 3 hours?

7:47 am (Hawaii) I was up from my slumber at 4:30 am, an hour into the session. But I quickly recoiled from this conscious world back into sweet sleep for another 3 hours. What do I find? The market down 250 points (Dow), then within a few minutes, down 300 points. Yet, gold and silver are down, too. Strange. That leads me to believe FAZ has to be doing well. Sure enough, it's at 62+, well above yesterday's closing price (58+).

In the past week, FAZ has gone from 50 to 67 to 55 and now to 62. Amazing. Not surprising. Just incredible. There's no doubt it will go to 100, though the whole rubber-band effect of political trickeration is far from over, and FAZ could easily see 50 again before the run to the century mark. Today, 1) the head of the ECU resigned, and 2) Greece may default over the weekend. Why this is shocking the market, I don't know. Every nation that is dependent on crack dealers (banksters) will become crackheads sooner or later. Then they own you. And the grimy puppeteers are playing every nation on earth, using paper (digital) money to shoot bullets into any remaining strength.

I've been in 100% cash for practically the past two weeks. It was tempting this week to scale into DGP and FAZ, but I opted not to. The US dollar is hot, now above 77 with all this Euro crisis craziness. Eventually, though, gold will rally on this as the heat of today's news cools off. I might scale in a little bit on DGP if it can get back to 67 or 65. FAZ was and still is good to scale in at 55 or 50, but I didn't pull the trigger. I am glad that I'm not long this effed-up market trying to beat machines from another solar system, or trusting any of these monetary system decision makers who refuse to admit that Keynes is wrong. Ultimately wrong.

Bloomberg: US stocks tumble on speculation Greece may default (Sept 9)

Bloomberg: Treasury 10-year yield falls to record on Greece default concern (Sept 9)

Business Insider: Here's why everyone's thinking Greece might default (Sept 9)

Le Fly: AUDIBLE: Preparing for a crash (Sept 9)

CNBC: What happens if Greece defaults (June 16)

> Slideshow

Let them have it

8:26 am (Hawaii) It's times like this, when I'm still lying in bed, a cool breeze blowing through and a warm Hawaiian sun rising above the mountains that I feel thankful. Especially when the market is sometimes puzzling, as it has been this week. But I'm at peace for one reason: I didn't have any conviction about direction and stayed out of the game.

When the Swiss National Bank devalued the Franc yesterday, it could have (should have?) been bullish for gold. Instead, the Franc lost 10% (no surprise) and gold swooned. Brother Turd Ferguson explained this morning that it's the SNB that is playing the yellow metal like a seasoned poker player using a rigged deck. So, until the selling in gold ceases — Turd sees a dip to 1750 or even 1675 — what to do? Turd advises sitting out.

Sitting out is fine for an uber-bull, which I'm not. I'm no bear on gold or silver, but I don't trust the puppeteers, whether they be CME mafia or SNB. I'd rather wade into the fiery river of paper gold and paper silver when a multitude of factors are in my favor. Not just one or two, but many factors. Otherwise, I'm just fine laying here and studying events and the twists and turns from afar.

An agnostic or bear would've stepped in by now to ride gold down via puts, shorts on paper gold, or an ETF like DZZ. Or ZSL (silver ultra bear). I mentioned recently that the downside effect of DGP at 60 or AGQ at 200, or FAZ at 55, even 50 would whet my appetite again. Right now, we have DGP at 66.33, AGQ at 223.03 and FAZ at 55.08.

The Dow Jones is +253, right about at the high of the day. AAPL was up 1.5% yesterday, which I noted as a possible tell for the market. Sure enough, AAPL is up another 1.3% and pulling the market up with it. This is bizarro, of course. AAPL at 384 is still rather cheap based on fundamentals. But with so many companies ready to announce lower expectations for Q3 and Q4, this move up by the indices is purely technical and I suspect owned by the space alien HFT machinery.

I don't bemoan these algo computers. I just stay out of their way unless I'm brainy enough to anticipate the next move, then plant my seeds accordingly. A genius like Le Fly was buying in yesterday, dumping his bear trades along the way. He has his own set of indicators (the PPT) and it has worked quite well for him (and his subscribers) from what I've seen over the past year or so.

As for gold, with the margin requirement hike in China over the weekend, plus the SNB/gold shenanigans, that's far too much to overcome for peon traders (like me) if we are strictly on the bull side of the battle. If spot gold returns to 1725, as Turd says, then it's not far away. After hitting 1920 overnight on Monday, then dipping below 1800 today, another 75 points down could happen in the next 12 hours.

In other words, it's probably too late to trade on the bear side at this point. Fine with me. My guess is that the monster machines will read the chart, as it did with FAZ on the recent massive gap up, and take DZZ higher tomorrow. The shorts will ride this out further and lower as DZZ makes traders more fiat. But like FAZ and most gap-up plays in this murderous market, the run will be done soon enough.

Today's gap higher on strong volume will unlikely be followed by a change in direction overnight. Intraday tomorrow is another story. Spot gold went from a one-time high of 1818 to 1700 in days. The recent high of 1917 was met by a steep decline (to 1700), and was topped by the run to 1920 on Monday. If today's slide to just below 1800 proves to be support, so be it. If not, cheaper entry points will be welcome. I'm not trying to time the bottom and be perfect. It's just good to be aware on a pristine autumn morning in my favorite place in the world.

Wednesday cinema & library (updated 10 pm HST)

Blogs

(new) Silver Shield: Honest work for honest silver pay (Aug 17)

(new) Andrey Dahskov: Recent gold hedging activity - a warning sign? (Aug 17)

(new) Phoenix Capital Research: 3 reasons why QE3 ain't coming anytime soon (Aug 17)

(new) Phoenix Capital Research: Think the crisis is over? Think again! (Aug 17)

> "If you thought the first leg down for this market collapse was bad, wait until you see the next one. I fully expect the S&P 500 down to 1,000 in short order, or possibly even lower."

Turd Ferguson: (pm) This could be significant (Aug 17)

Zero Hedge: As Chavez pulls Venezuela's gold from JP Morgan, is great scramble starting? (Aug 17)

Dan Norcini: Gold - 4-hour chart update and comments (Aug 17)

> Charts 4-hour gold | CCI daily | Silver daily | HUI daily | US Dollar daily

Turd Ferguson: (pm) Check this out! (Aug 17)

> Chart Gold Dec 15-minute | Dec hourly | Silver Sept hourly

Turd Ferguson: (am) Wallowing in the mire (Aug 17)

> Charts US Dollar 12-hour | US Dollar weekly | Gold Dec 2-hr | Silver Sept 2-hr

King World News: James Dines - Mass psychology moving towards gold, silver (Aug 17)

King World News: Jean Marie Eveillard - Flight from paper currencies fueling gold explosion (Aug 17)

Brandon Smith: 4 ways to break the silver manipulation barrier (Aug 15)

Vlogs

(new) Wide Awake News: America's last days, the empire strikes out (Aug 17)

(new) george4title: Bankruptcy attorney: Hire an attorney to fight banks (Aug 17)

(new) The Young Turks: Chupacabra captured? (Aug 17)

(new) The Young Turks: Trump slams oil subsidies because of Buffett (Aug 17)

(new) manoftruth: In Roseville Thursday (Aug 17)

(new) H1INC: I got fucked in a ponzi scheme (Aug 17)

(new) ScrapGold Business: Video 1 (Aug 17)

(new) Pastor Dowell: What's going on now (Aug 17)

bigdad06: $7000 gold! (Aug 17)

> Guest: Gary Yantis

Carl Richards: Why making a budget matters (Aug 17)

(new) Tony Sagami: The myth of Chinese outsourcing (Aug 16)

(new) Peter Schiff: Hyperinflation, gold and the true economy (Aug 16)

Blog commentary

Tom L: @DPH: Chavez (Aug 17)

ewc58: I see nothing wrong with Chavez doing this (Aug 17)

> Quoting Bix Weir: "The Nationalization of mines phase ... has begun. Share holders will rapidly try to get OUT of their mining shares and buy the REAL METAL driving prices further skyward. COMEX hedges will have to default as there is no metal production to cover forward sales."

Audio

(new) Gary Null: America's 14 most ready to riot cities (Aug 17)

King World News: Bill Flickenstein (Aug 17)

Marketplace Money: What to do with your money now (Aug 17)

King World News: James Turk (Aug 15)

Reports

(new) Washington Post: Companies paid more for wholesale goods (Aug 17)

Video

Tuesday cinema & library (updated 9 pm HST)

Monday's gains on severely low volume were ominous, weren't they? Today, indices struggled in the red, down significantly on no real news from Sarkozy and Merkel, before rallying to pare more than half their losses.

The interesting indicator for me was increased volume in DGP. FAZ had similar volume to yesterday and fell from 59+ to 57+ during the late-day rally. DJ finished -76.97 (-0.7%) to 11,405.93. Nas down 31.75 (-1.2%) to 2,523.45. S&P 500 -11.73 (-1%) to 1,192.76.

My Regular watch list is 28% green, 70% red. AAPL, AMZN, BIDU, LULU, NFLX ... many momo stocks down. LULU down more than 7%.

The Metals list didn't fare much better, just 41% green, 59% red. Silver miners had been red-hot, but fell back today (SIL -1.3%). Could be a breather before a run higher again.

GSVC was up over 16 today before settling at 15.41 (now afterhours) for a 1.9% gain after releasing earnings info. Haven't touched this since selling at 12.10. In hindsight, I should've left that position alone and picked up more DGP as a psudo-hedge. (Oddly enough, though GDX and GDXJ are down today, XG is up moderately. Not going there, though.)

Between now and Jackson Hole (26th), there's no apparent catalyst. Since last week's series of crashes (and melt-ups), the market has been relatively calm. Maybe the downside has been priced in and too many traders are expecting an upside explosion similar to last year's fall and winter. If QE3 arrives and traders are as skeptical and cautious as I imagine they might be, it doesn't really matter to a physical gold owner. Few things bring peace of mind, but a crate full of gold bars would have to be one of them, right?

Blogs

Turd Ferguson: (pm) Feeling good, Louis! (Aug 16)

> Charts 2-hour Dec gold | 2-hour Sept silver

Turd Ferguson: (am) An interesting day awaits (Aug 16)

> Charts 2-hour Dec gold | 2-hour Sept silver

Reggie Middleton: The French markets today and overlooking inevitable pan-European real estate collapse (Aug 16)

Bruce Krasting: Gold and Swiss National Bank (Aug 16)

SGS: Has everyone given up on Comex? (Aug 16)

Gold Money: Gold price held up by sick dollar (Aug 16)

Jeff Nielsen: Watch gold/silver/oil price ratios (Aug 15)

Mike Adams: 7 things most people don't know about national debt, banking, money supply (Aug 2)

Vlogs

(new) Mike Maloney: Debt Collapse - The case for $20,000 gold (Aug 16)

libertarianrealist: Ben Bernanke's big lies + $500 silver (Aug 16)

silverfuturist: Possible meetup with Gerald Celente (Aug 16)

The Weekly Telegram: Update (Aug 16)

endlessmountain: Jon Stewart/Ron Paul, school setting economics (Aug 16)

endlessmountain: The Silver Log - Long-term volatility on Dow, gold, silver (Aug 16)

ScrapGoldBusiness: JP Morgan predicts $2,500 by Christmas (Aug 16)

Casey Research: Dollar is going over the edge (Aug 16)

Hit the Bid: Ron Paul 4 prez (Aug 16)

Even Keel Media: David Coffin (Aug 16)

BrotherJohnF: Short Age (Aug 15)

RT: Lew Rockwell: Death of the dollar (Aug 15)

> Rockwell enters at 2:30

TheLordHumungus: Is it too late to buy gold and silver (Aug 15)

Audio

Al Korelin: Roger Wiegand (Aug 16)

Blog commentary

After the Storm: A few 'big picture' charts from Adam Brochert (Aug 16)

Reports

CNN: Wells Fargo to test $3/month debit card fee (Aug 16)

Business Insider: Closing bell — Stocks fall after flood of bad news (Aug 16)

Zero Hedge: Key highlights from Merkel-Sarkozy meeting (Aug 16)

Business Insider: The most important points from Merkel, Sarkozy (Aug 16)

Business Insider: Sarkozy to tax financial transactions (Aug 16)

Zero Hedge: High-yield market selloff implies '100% probability of mild recession' (Aug 16)

Business Insider: We are Japan (Aug 16)

RT: Govts rob citizens, money printing race disastrous (Aug 16)

USA Today: Allstate sues Goldman over sour mortgage-backed securities (Aug 16)

Stars & Stripes: True cost of wars in Afghanistan, Iraq is anyone's guess (Aug 15)

Daily Telegraph: Robert Zoellick: Global markets face new 'danger zone' (Aug 14)

Business Insider: Germany wants Spain, Italy to sell gold (Aug 9)

Zero Hedge: CATO Institute finds Fed must be abolished (Nov 13 2010)

Video

(new) Fox: Peter Schiff (Aug 16)

Keiser Report: Banking looters (Aug 16)

MSNBC: Food stamps as economic stimulus? (Aug 16)

Journeyman Pictures: Poetic Justice - Mexico (Aug 16)

The Young Turks: Ron Paul #2 in straw poll (Aug 15)

RT: What you didn't know about the war (Aug 15)

Journeyman Pictures: The Secret Garden - Bhutan (Aug 15)

The Real News: Bart Chilton: 'A hair trigger away from economic calamity' (Aug 14)

All in all

The Golden Rule:

Eventually, he who has the gold makes the rules

11:09 am (Hawaii) All in all, my teeny amount of sedentary physical gold did far better today than my active thumbs and fingers in trading. Something to be said there. I tried to outguess the market, the algo machines, and lost on the GSVC trade. Is S&P 500 heading back to 1,333? If it is, GSVC is going back up to 19 and beyond. Even with the ridiculously wide spreads. (Btw, GSVC is now at the original pullback area 15.55) I was hoping for on the move last month to near 20. Lesson is clear: let price come back to your level of conviction instead of chasing!)

But that's the big question, is it not? Are we just going to whipsaw in this range until Jackson Hole on the 26th? Or is this just a dead cat boingboing?

I'm gray area about this, so a small position in AAPL is on deck. BIDU.

Update 11:18 am (Hawaii) Doug Kass on Fast Money says the lows for the year are in. Maybe he and a lot of people really believe this is a repeat of last year. Maybe he knows QE3 is coming. For sure.

"We're now as oversold as we were when Germany invaded France (in WWII)."

If the market rallies from here to New Year's in rip-em-a-new-one fashion, it begins here. Or rather, it began two hours ago — one hour after the FOMC's statement. If the market tanks, I don't want to be 100% long and stubborn.

Which of these possibilities happens first?

• AAPL from 370 to 400
• GSVC from 15 to 20
• Spot gold from 1750 to 1650
• Spot silver from 38 to 35
• FAS from 15.50 to 20
• FAZ from 60 to 40
• FAZ from 60 to 100
• S&P 500 from 1172 to 1333
• Dow Jones from 11239 to 14000
• Nasdaq 2482 to 2700
• AGQ from 188 to 382 vs ZSL from 14.66 to 24
• DGP from 61 to 80 vs. DZZ from 4.90 to 7.25

And finally ... spot gold from 1725 to 2000.

To boot, how about this:

• US credit downgraded by another major rating agency
• US Dollar from 74 to 70
• US Dollar from 74 to 78
• Euro (vs USD) from 1.43 to 1.50
• Euro (vs USD) from 1.43 to 1.35
• Geitner resigns before Labor Day vs. Geitner survives to the end of Obama's term
• Bernanke installs official QE3 by Jackson Hole vs unofficial stimulus after Jackson Hole

Carnage

5:51 am (Hawaii) Ever since late night local time, the futures were a bright red across the board with the exceptions of gold and silver. Now, midway through a session that officially puts the market in correction mode — Dow -334 points (-2.8%), Nas -91 (-3.4%) and S&P -39 (-3.2%) — only gold is holding up.

That's the positive news for anyone holding gold stocks and physical gold. But even DGP is selling off in the past few minutes, now up just 0.5%. Silver, as expected, is taking a breather. AGQ was as high as 238+, but got hit with lightning and is dow down 4% to 221. Maybe it was the CME mafia, but I think it was simply a waterfall of stop-loss orders in this wicked environment.

Yes, the smackdown in Italy and Spain exacerbated an already weakened market. So, my forays into DGP is sturdy, but XG is down 10%, kneecapped along with the rest of the market. It rallied last week to 14+ and I had a chance to sell at break-even, but stubbornly, I held on. I'll continue to hold on having steeled my nerves in anticipation of more abuse. The miners are all being shot today, from XG to EXK.

GSVC is being hammered, as well, to the extreme as a small cap. I can live with that and XG on this awful tape because the positions are small. They're bleeding badly, but they will be back at some point. Gold will keep climbing and miners eventually will have their up days. GSVC still has 15% of its holdings in Facebook, and with few other options in the market, that spotlight will draw traders at some point as moths go to a lamp.

(I'm still 30% in equities with the small positions, waiting for better prices to add more physical metal. And absolutely, positively no margin for years. Today's exactly the kind of day, and reason, why margin is too dangerous for most people.)

FAZ is at 56.25, up 8.6% on the Euro bank carnage. I didn't get back in last week in the mid-40s. I didn't get back in yesterday at 51. Yesterday, when Faz should've been rallying, it was down and half the banks on my Debt Spiral List were up. It looked like some puppeteering was coming down the tracks. I didn't trust my hunch or the obvious wreck coming. I should've scaled in at that point.

Even the 10-year note is down 4.4%. That's how much the world hates the dollar, and the byproduct is gold's strength. Gold as in anything golden that doesn't require actual labor, employees and thus, health care. Yes, it's the metal itself that is proving indestructible. But, as I type this, DGP is only 9 cents up for the day. Fear has crept in, and everyone is cashing out, just when it seems the market may have bottomed out for the day.

Or is this the beginning of the real collapse? It has to resemble one before the Fed installs QE3, after all ...

Early morning shine

4:06 am (Hawaii) No clock alarm here. I was up by 3:45 or so to find some interesting charts for Spot Gold, Silver and the US Dollar. This was not what I expected, but that's just fine. (I actually expected/still expect a summer decline in precious metals that will allow me to convert my disappearing fiat currency into metals.) Silver just ran from roughly 35.35 to 36.05 in less than two hours. This came after a gradual overnight decline overseas. Gold went from about 1534 to 1546 in that same time span. Why?

USD tanked from 75.88 to 75.44 simultaneously. Why did it stumble? Is it about Europe telling Greece this and that? Maybe. The pressure caused by global debt crisis concerns is not going to ease overnight. Maybe not for weeks and months. Years.

Reuters: Europe tells Greece: agree to austerity, get more loans (June 20 2011)