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Apakah Gelembung Obligasi AS Akan Segera Pecah?

August 29th, 2013 No comments

Let’s be clear. We’ve intentionally blown the biggest government bond bubble in history. We need to be vigilant to the consequences of that bubble deflating more quickly than [we] might otherwise have wanted. The biggest risk to global financial stability would be a disorderly reversion in the yields of government bonds globally.”

– Andy Haldane, Bank of England director of financial stability

“Words pay no debts.”

– William Shakespeare

Hari ini level hutang Amerika Serikat dan negara-negara maju lainnya mencapai rekornya.  Artinya bahwa sedikit saja terjadi kenaikan bunga maka akan menghancurkan anggaran pemerintah. Dalam kasus Amerika Serikat, anggaran tahunan sudah defisit menembus $1 triliun.

Bahkan, jika yield obligasi 10 tahun AS kembali ke areal wajarnya, yakni sekitar 6,5%, akan membuat defisit semakin tak terkendali, yang justru akan mengakibatkan pencetakan uang lebih besar dan mendorong devaluasi nilai tukar dollar ataupun aset-aset dalam denominasi dollar yang Anda miliki.

Dengan meliat grafik di bawah ini, Anda dapat melihat seberapa rendah yield saat ini dalam konteks sejarah:

Serta juga perlu diperhatikan rata-rata yield obligasi AS 10 tahun sejak tahun 1960an yang berada di 6,5%.  Sementara yield saat ini di bawah level 3%.

Karena harga obligasi berbanding terbalik dengan yield-nya, setiap terjadi kenaikan yield maka konsekuensinya bagi para investornya adalah kehancuran.

Belakangan harga obligasi merosot – yang mendorong yield, yang bergerak berbanding terbalik dengan harga, melonjak – sejak ketua umum the Fed AS, Ben Bernanke, memberikan indikasi awal bulan Mei lalu bahwa bank sentral AS tersebut akan mengurangi program stimulus $85 milyar/bulan untuk membeli obligasi dalam rangka mempertahankan tingkat bungan rendah.

Sejak awal Mei tersebut, yield obligasi 10 tahun AS melonjak lebih dari 1 persen, dari 1,62 persen ke sekitar 2,90 persen di pekan lalu. Dan ini mewakili peningkatan 79% borrowing cost pemerintah AS hanya dalam kurun waktu 3 bulan!

Di saat yang sama, ini merupakan kenaikan terbesarnya setidaknya sejak 1962, demikian menurut Dan Greenhaus, chief global strategist dari sekuritas BTIG di New York.

Alasan lain mengapa harga obligasi AS memperoleh tekanan jual terbesarnya dalam sekitar 50 tahunan tersebut adalah tidak berhentinya penjualan obligasi AS oleh antara lain adalah Cina dan Jepang.

Berikut adalah 4 artikel pendek Tyler Durden dari www.zerohedge.com yang akan memberikan pencerahan mengenai apa yang dilakukan investor asing dengan kepemilikan aset obligasi AS mereka, bagaimana dampaknya di pasar perumahan, dan mengapa diproyeksikan hampir pasti sejarah akan berulang dalam waktu dekat ini:

1) TICsaster: Foreigners Sell More US Securities Than After Lehman Bankruptcy (August 15th)

While Americans were blissfully BTFD in June, and enjoying the media propaganda that “all is well” and the beard has their back (he does, but not in the conventionally accepted way) foreigners were selling. Did we say selling? Pardon, we meant dumping with a vengeance, throwing out the boatload with the bathwater, with both hands and feet and getting to da choppa.

As the just released TIC data report indicates, in June foreigners, both private and official, were hitting every bid they could find. Literally. For the first month ever, every single security class was sold off: Corporate stocks: sold – $26.8 billion; Corporate Bonds – sold $5.0 billion; Agencies: – sold $5.2 billion, and, perhaps the culprit of it all, Treasuries, saw the biggest dump ever, as foreigners sold an epic $40.8 billion! Adding across the various asset classes, the consolidated foreign sale in June 2013 was worse than Lehman and the month after it.

Somehow to foreigners, Bernanke’s Taper Tantrum was a more shocking event than the biggest bankruptcy filing in history (one which launched the global central bank scramble to buy up everything that is not nailed down).

Still think it’s priced in? If just the speculation that Bernanke may taper launched the biggest US security dump by the rest of the world in history, what happens when speculation becomes fact?

Source: TIC

Catatan Pribadi: Untuk menjawabnya, menurut saya sebelum fakta berbicara dampak pengurangan stimulus ini sedikit-banyak sudah terantisipasi di pasar obligasi.

2) China, Japan Sell Most US Paper In Years; Foreign Treasury Holdings At 2013 Lows (August 15th)

And the bid hits just keep on coming.

While previously we reported the foreigners as an aggregate class sold the most gross US securities ever in the month of June, we also learned that in June the biggest selling came from America’s two largest creditors: China and Japan (excluding the Fed of course, whose P&L losses are now approaching $300 billion in the past 3 months, or would if the Fed marked to anything but unicorns).

In June, the two countries combined sold $42 billion, with each selling over $20 billion: the most in years.

What is interesting is looking at the composition of the selloff: the bulk of it was in the form of short-term Bills, as both countries were actually buyers of coupon securities. Net of coupon purchases Bill sales were even worse, or over $50 billion for the two countries alone.

Which also explains why Bernanke scrambled to make the distinction between tapering and tightening: supposedly without this distinction the pressure on the 3-6 month bucket would have been so large that not even Bernanke’s “forward guidance” would be able to offset rising short-term rates, which as everyone knows, would mean game over at a time when the economy is still at stall speed and when the disconnect between real future inflation and Fed-central planning implied growth rates are the biggest ever.

Regardless of the factor, the reality is that America’s creditors are saying goodbye just at a time when Bernanke is preparing to taper. The bottom line: Grand total foreign TSY holdings dropped to just over $5.600 trillion, down $57 billion in one month, and the lowest total in 2013.

If that is what the Chairman wanted, he got it.

Source: TIC

3) “The Bearish Trend Has Resumed” – Don’t Show “A Tweeted Out” Bill Gross This Chart (August 18th)

On Friday, Bill Gross, in a surprising act of defiance, sent out a tweet that promptly moved the bond market in the wrong direction. To wit:

What happened next was certainly not what the Fed and Treasury desired: the 10 Year moved wider to fresh 2 year highs.

While the subsequent release of a Hilsenrumor managed to pull back the Friday yield blowout somewhat the pain may just be starting. Especially for Bill and his hundreds of billions in long rates exposure.

Fast forward to two hours ago when in the latest tweet from Gross there was a distinct sense of desperation. We don’t know if there was a tap on the shoulder from Washington D.C. to precipitate it, but we wouldn’t be too surprised:

Maybe it is. But if the following just released forecast of where the 10 Year is going, from Bank of America’s chief technical strategist MacNeill Curry is accurate, not only is the bond bottom nowhere near but we sense a Tweet storm is coming from Bill Gross.

From BofA:

After 5 weeks of range trading, US Treasury yields have resumed their bear trend. US 10yr yields target 2.951%/3.045% before greater signs of top emerge. Bulls need a break of 2.730% to invalidate the bearish potential.

While the above is nothing more than a few squiggly lines and their extrapolations, in the New fundamental-less Normal self-fulfilling prophecies (i.e., technicals) have a way of, well, self-fulfilling. The only problem with a blow out in yields to north of 3% is that not only does it kill any mythical housing recovery, it outright obliterates any hopes of a continuing GDP tail wind from the housing market, even from investors, speculators and flippers. We are confident we are not the only ones to notice that the APR on the 30 Year Fixed FHA from Wells just soared to over 6% – a level that has no place in an economy that is “growing” at 1.5%.

But before we lament the end of the great 30 Year bond market, we will simply recall that what is happening now is a carbon copy of what happened two years ago, when all it took for yields to plunge over 100 bps was a 20% drop in equities following the Great Debt Ceiling fight and the US downgrade.

Because there is nothing easier for Bernanke to do (in 15 minutes or less) than to enact a wholesale scramble out of stocks and right back into bonds, when he needs it. (All emphasis is mine.)

Then only question is “when”?

4) “Buyer Of Last Resort”: Guess The Mystery Buyer X (August 20th)

As we previously reported, using TIC data, in the month of June the international community did something it has not done in years – it sold US Treasuries with passionate zeal and reckless abandon. In fact, in that one month alone, $57 billion in total Treasury holdings (from $5.657 trillion to $5.601 trillion) was dumped in order to avoid major and accelerating losses. And yet there was one entity that was buying, on a virtually matched dollar-for-dollar basis, all that the foreign entities had to sell. The distribution of June sales among the select largest holders of US paper, and the sole, solitary buyer, is shown on the chart below.

Guess who this Mystery Buyer X, aka the “sore thumb”, is who boldly bought everything that no other man, woman or child wanted to buy in the month of June.

Berhenti dari kecanduan – baik itu obat-obat terlarang, maupun stimulus QE – memang sangatlah sulit dan akan memerlukan periode waktu yang disertai rasa sakit. Suku bunga memang sudah berada di rekor terendahnya dan pada nantinya akan naik dari level saat ini. Sehingga ini bukanlah sebuah akhir dari segalanya.

Namun sepertinya Bernanke dan bank sentral AS tidak tahu betapa paniknya pasar mengenai rencana mereka. Salah atau benar, pasar sepertinya tidak yakin bahwa ekonomi cukup kuat untuk mendukung rencana the Fed.

Jadi pertanyaan yang mungkin muncul adalah, Can the world afford higher interest rates? Dan jawabannya coba dijelaskan oleh James Gruber, pendiri Asia Confidential, sebuah media cetak investasi mingguan gratis, oleh karenanya masuk dalam kategori WAJIB DIBACA yang ditulisnya di pertengahan Juni lalu:

“That’s the end of QE tapering talk then? Not quite, but it should die down somewhat, give U.S. Fed Reserve conduit Jon Hilsenrath’s latest kiss-and-tell article in The Wall Street Journal . Thankfully, it might also stop all the blather about the U.S. and global economies recovering (they’re not) and this being the end of the bond bull market (premature). What most investors fail to realize is that developed markets, including the U.S., simply can’t afford a normalization in interest rates: higher rates on government debt would crush their economies. This means QE tapering is highly unlikely and the current money printing experiment will only end when investors lose faith in government bonds. We’re getting closer to that end game, but we’re not there yet.

If the above is right, we may be in for a prolonged period of volatility where investors expect QE to be cut back, it may indeed get cut back at some point, only to increase again when it’s recognized that any normalization in interest rates will create huge problems. For emerging markets such as Asia, it’ll mean increased volatility, although I’d argue the past week’s stock market moves are reverting back to normal from an abnormally tranquil period over the past 3-4 years. This will create some opportunities, but be aware that the odds still favor a bond market crash at a later date. (All emphasis is mine.)

What’s behind the past week’s action?

What explains the tumultuous market action of the past week? Put simply, there have been escalating fears that U.S. Federal Reserve will cut back on its US$85bn a month stimulus program. This has led to rising U.S. bond yields over the past month, thereby putting upward pressure on yields around the world.

Cutting back on QE would mean reducing the printed money that the Fed has been using to buy bonds. That would result in less liquidity, less money in the financial system. The printed money has helped support asset prices, particularly stock and bond markets. Less liquidity would reduce this support.

Much of the printed money had leaked into areas offering the best growth prospects, primarily emerging markets such as Asia. This led to some spectacular stock market performance, especially in South-East Asia. Naturally, talk of QE cutbacks hit the best performing, less liquid markets such as Thailand, the Philippines and Indonesia especially hard.

Japan is another matter. Stimulus equivalent to 3x the U.S. as a proportion of GDP and an inflation target of 2% has resulted in manic action across Japan’s stock, bond and currency markets. The yen has snapped back after being oversold, but remains extremely vulnerable given the stimulus policies of the Bank of Japan (BoJ).

Meantime, Japan’s bond market has investors fleeing due to a 2% inflation target almost guaranteeing them large losses and a central bank intent on keeping yields low to prevent interest being paid on government debt spiraling out of control. Investors are starting to realize that the government may not win this battle.

There is an alternative view: that the reason for the recent Japanese volatility is that the BoJ is backing away from its inflation target and stimulus efforts. It’s a laughable notion put forward by seemingly respectable commentators (see here ). It ignores the fact that if the BoJ’s efforts succeed, rising inflation will eventually lead to rising bond yields and interest rates, which will kill the Japanese economy (see here for my previous article on this).

Later in the week, of course, the Fed came to the market’s rescue. Via its Wall Street Journal mouthpiece Jon Hilsenrath, the Fed essentially tip-toed back from earlier suggestions that it would soon reduce QE. Here’s what Hilsenrath had to say:

“The chatter about pulling back the bond program has pushed up a wide range of interest rates and appears to have investors second-guessing the Fed’s broader commitment to keeping rates low.

This is exactly what the Fed doesn’t want. Officials see bond buying as added fuel they are providing to a limp economy. Once the economy is strong enough to live without the added fuel, they still expect to keep rates low to ensure the economy keeps moving forward.”

The math against higher rates

Amid all the hoopla about whether the Fed will cut stimulus or not, investors (and the mainstream media which covers them) seem to be ignoring a more fundamental issue: can the developed world cope with a normalization in bond yields and thus interest rates?

To answer this question, let’s crunch some numbers. Bond guru Jeff Gundlach has looked at the impact of higher rates on the U.S. and he doesn’t like what he sees. He suggests that if interest rates in the U.S. normalize and increase 100 basis points annually over the next five years, the interest expense on government debt would rise from US$360 billion last year to US$1.51 trillion.

To put this into perspective, the recent U.S. government cutbacks which many worried would tip the economy into recession totaled just US$85 billion. Any normalization in rates would result in brutal cutbacks to government programs, seriously impacting the economy.

For another example, we can look at Japan. As I’ve stated on many occasions, if rates rise to just 2.8%, interest on Japanese government debt would be the equivalent of 100% of government revenues.

The implications of higher bond yields and higher interest rates would go well beyond government debt though. Other countries with fewer government debt issues would suffer too. For instance, my native Australia is relying on the property sector (a bubble slowly deflating) to pick up some of the slack from a mining sector which is getting hammered by a slowing China. Any rise in Aussie rates would quash any hopes of a housing recovery (even if it was highly unlikely to happen anyway).

In Asia, a normalization in rates would have a broader impact. Higher rates and tighter money would hit elevated asset markets across the board, including the stock, bond and property markets. Those which have benefited most from the low rates and subsequent money inflows, such as South East Asia, would be hurt most. In effect, the past week would be a taste of things to come.

A bond crash will have to wait

If I’m correct, central banks can’t afford to turn off the stimulus tap. If there are any signs of rising bond yields, these banks will print more money to buy bonds and keep the yields down. In other words, you shouldn’t expect less stimulus going forward, but more.

Central banks can keep this game going for a long time, but there will come a point when the bond markets will say enough is enough. As I wrote in an article on Japan recently:

“In many respects, Japan is the template for what’s to come in other developed markets. After an enormous credit bubble which burst in 1990, Japan has refused to restructure its economy in order for it to grow in a sustainable manner. Instead, it’s chosen the less painful route of printing money to try to revive the economy and reduce debts in yen terms…

… The trouble with this is that there comes a point where bond investors lose confidence in the ability of the government to repay the money. These investors then refuse to rollover government debt at low rates. When bond markets dry up, they normally do so quickly. The current wobbles in the Japanese bond market can be seen as a prelude to this endgame.

Though Japan has escaped its day of reckoning for a long time, other developed markets are unlikely to be as lucky, given the extent of their indebtedness and continued commitment to flawed policies.”

What it means for Asia

Investor reaction to recent market volatility in Asia has been fascinating to watch. It’s almost as if investors have forgotten that emerging markets, and particularly Asia, experience sharp spikes and dips on a regular basis. It’s a classic case of an investor bias known as recency bias, which is essentially extrapolating from recent events into the future.

The reason that I say this is that when I worked in South-East Asia for three years (2006-2009), the volatility experienced during recent weeks was the norm rather than the exception. And colleagues back then who’d been through the Asian crisis thought that I’d experienced little of the volatility that South-East Asia had to offer!

The recent volatility though is likely to become the norm again. Any hint of less QE will see hot money leave Asia, only to come back when it becomes clear that stimulus should be here to stay.”

What Do the Charts Say?

MacNeill Curry dari BofA mengingatkan 2 hari lalu bahwa “bond markets are flashing warning signals of a change of trend.” Secara khusus, dia mencatat bahwa obligasi AS bertenor 10 tahun ‘tengah beresiko’ meningkat jika yield kembali berada di bawah 2,802%:

US 10yr Note futures at risk of a bullish turn

“We have been and remain US Treasuries bears, targeting 3.045%/123-02 in 10s. However, evidence for a bullish turn in trend is RAPIDLY INCREASING. Specifically, the persistent Bullish Momentum Divergences and Friday Bullish Reversal Candles across much of the curve all warn of an earlier than anticipated turn in trend. For now we remain bearish, but a break of 2. 802%/125-09 in 10s would force us to change our view.

Kesimpulan

Bud Conrad, seorang Chief Economist di Casey Research, benar-benar memberikan ulasan yang tepat dalam artikelnya yang ditulisnya belum lama ini:

“As the American public doesn’t save much, and because foreigners are stepping away from US government debt, the Fed is left as the buyer of last resort and will have to keep up its QE.

Among a number of problems, the money creation required for the Fed to serve as the government’s lender of last resort can be very inflationary once it ultimately bleeds into the economy. For now, most of the new money has been bottled up on the balance sheet of the Fed. With low rates, that is manageable. But if rates rise, as they eventually must in the face of rising inflation and a loss in confidence in the dollar, the interest the Fed pays on deposits rises as well, putting the viability of the institution at risk.

In addition, as rising rates increase the cost of servicing the government’s many debts, federal deficits will also rise. And that has the very real potential to create the equivalent of an economic death cycle as foreigners, and pretty much anyone other than the Fed, rush to the exits on US government paper, causing interest rates to rise further.

While it is impossible to say with any certainty when the US government bond bubble, the largest in history, will burst, the recent up-moves in interest rates should serve as a clear warning shot. From the charts, it looks like the foreigners have taken notice.”

Terakhir, adalah sebuah gambar kartun lucu mengenai obligasi.

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 27 Agustus 2013

Categories: Pasar Internasional Tags:

Apakah Bottom Emas Sudah Terlihat?

August 25th, 2013 No comments

“The world is going to have a new monetary system in this decade that we are in. We are going to experience this huge deflationary crash around the world. The world will probably end up on some sort of new monetary system, probably after governments try and print their way out of this and cause hyperinflations of all the currencies. People will just lose confidence in currency and what do they always go back to throughout history time after time for the last 5,000 years … they always go back to gold and silver.”

– Mike Maloney, Hidden Secrets of Money Ep.2

Dalam jangka waktu menengah-panjang, saya masih memiliki sentimen bullish terhadap emas. Namun, masih terlalu dini untuk menilai bahwa tekanan emas saat ini sudah berakhir, dan saya berkeyakinan bahwa emas masih mungkin untuk tertekan lebih rendah lagi.

Jika demikian maka saya menduga tekanan berikutnya akan memberikan dasar untuk loncatan emas ke level lebih tinggi dalam beberapa bulan dan tentunya beberapa tahun mendatang.

Saya sudah pernah menyebut ini, tapi penting untuk diulangi lagi supaya kita ingat bahwa sejumlah pergerakan besar biasanya terjadi di 10% terakhir dari trennya.

Dengan kata lain, mungkin kita sudah mendekati dasar dari penurunan emas secara waktu, namun masih mungkin untuk terjadi penurunan dalam harga yang tajam.

Untuk memperlihatkan sedang berada di titik mana dan mau kemana pasar emas, berikut saya persembahkan 2 laporan menarik beserta sejumlah grafiknya.

Yang pertama dari Chris Rowe, yang membuat Technical Analysis Millionaire, yang menulis perkembangan emas terakhir terkait dengan dolar AS dengan cukup obyektif.

Laporannya sungguh merupakan hal yang WAJIB DIBACA bagi para investor maupun trader emas:

“When gold prices got slammed, did you get caught in the bloodbath or did you profit?

Guess which sector is luring investors back in again, right this very second…

Precious metals have recently been the talk of the town as an oversold bullish play for both the precious metal commodity as well as the gold miner stocks.  But what awaits you around them there hills?

The sector has certainly gained notable strength recently.  We simply cannot ignore the short-term bottom and recent strength.  If you’re asking yourself if you should jump in, the answer is based on your time frame and investment style.  After all, what might be a good purchase price in the eyes of Warren Buffett (whose time frame is said to be several decades) may not be a good price for a good swing trader.

I’ll lay out the picture and let YOU decide if it makes sense for YOU to get in.

  • As a short-term trader I’d stay away from the sector.

  • As an intermediate-term trader I’d stay away for now.

  • As a long-term investor I’d be more inclined to find an entry price in here somewhere.

Here’s Why…

The first chart, below, is the Exchange Traded Fund that tracks gold prices — GLD.  It’s what you’d use to trade gold if you don’t want a futures account.  Keep in mind the price of gold is highly correlated with the price of gold miner stocks (I’ll get into that in a second).

After seeing such a huge decline, of course investors are considering whether they should get in.

INTERMEDIATE-TERM

Two insanely sharp sell offs — in early April and late June — speak to the intermediate term picture.  They tell you that intermediate-term traders (weeks to months) recently exited in a big way.  That means it isn’t likely that those intermediate-term traders will “have your back” any time soon.  They just got out of a bunch of gold.

SHORT-TERM

Short-term we did see some strength.  We saw it already.  If you look at the picture above, you can see a gap lower in late June.  Gold made a “dead-cat bounce” to close the gap (as expected).  While it may continue higher in the short-term, on a risk adjusted basis it’s just not worth chasing it. Especially since the next larger trend (intermediate-term) is weak.  There’s more — in a second…

Let’s consider the bullish argument here (both are valid).  You can see the more recent, steepest, downtrend line was penetrated.  You can even see a small gap higher (7/22) as it was penetrated (no coincidence).  Gold retraced that gap higher and then looks like it’s trying to decide where to go next.

In addition to that sign of strength, you can see on the lower chart that the RSI made a higher high, up to a level not seen since November of 2012.  Yes, this is another sign of strength.  But as a buyer you have to ask yourself:  “Is that enough for me?  Or do I need to see more proof of strength?”

Personally, I’d need to see more.  Especially because gold is also running up against strong horizontal resistance and diagonal resistance from the next downtrend line.

Now, let’s get into the inter-market relationship between the U.S. dollar and gold prices (also, between the dollar and gold miner stocks).

Below you see two charts.  The top chart is the U.S. dollar index and the lower chart is Gold.  You can see the negative correlation.  The U.S. dollar has inverse influence on gold and therefore on gold stocks (which tend to be correlated with gold).

Once again, when you look below you can see the U.S. dollar on the top chart, but this time we put GDX on the bottom.  GDX is the Exchange Traded Fund that tracks the gold miner stocks.  You might ask why I only compare 2013′s price action above while I do 2 years of price action below.  I am asking myself the same question.  No reason.  Moving on…

You can see the negative correlation here too.  Okay, so we have proven the negative (inverse) correlation.  So where is the U.S. dollar about to go?

Understanding what’s going on with the U.S. dollar is a big help with understanding gold prices and therefore gold stocks.  The U.S. dollar has just bounced off of a key level and seems to want to continue the reversal higher.  The advance in the U.S. dollar should lean on gold prices.

Now if the dollar decides to slice through that key support level (around 81) as it has a few times in the past (to the upside or the downside), then it would have a positive impact on gold.  But we play the odds here, and it’s just more likely to bounce than to slice through.  The current trend is always more likely to stay in place — support levels are support levels until they are not, so we respect them and we MANAGE OUR RISK RESPONSIBLY so if we are on the wrong side of the trade we are not forced to sell the family car.

I don’t want to get into the story of “WHY” the dollar would decline or advance, because I don’t want to encourage you to try to figure out what Bernanke is going to say next.  It’s a sucker’s game.  It makes more sense to trade trends.  The odds are better.  But you should understand that the dollar advances when there is talk of “tapering” QE and vice versa.

You can see the red circle above and the blue circle below where the OPPOSITE happened.  There’s a long story behind this, but basically it was a flight from U.S. assets in general.  It was an unwind of a bunch of big trades that occurred when Bernanke first talked “tapering” in a significant way on May 22.  Just to stay on topic, you’re going to have to just trust me on that.  What’s important to note is the key trading range of 80.5 – 81 was respected and acted as support.

You can see the MACD in the lower part of the chart.  I circled one part to focus on where the MACD has not yet put in a buy signal.  But it’s something to watch because usually when you get a MACD buy signal in the dollar, you see more upside.  If the dollar gets back up to the upper end of its trading range (around 84.5) you’ll see gold prices testing their old support levels.

So with support in the dollar and resistance in gold I’d say the short-term and intermediate-term buyers are best suited to stay away. I am not a fortune teller.  Maybe gold explodes to the upside.  But if you want to play the odds that are in your favor, you’re staying away from gold here.  But you’re watching it because it has certainly shown some signs of life lately.

As a long-term investor I’d have to say gold and GDX are at historically oversold levels.  The metal is also trading near a historically significant level (red line).  Look at the bottom of this 10-year chart and notice there is only one year with WEEKLY RSI buy signals (2013).  There’s also a weekly MACD buy signal.  These are long-term signals.

I’m not ready to count gold out just yet.  I know Bernanke has to remove the punch bowl and, yes, that would probably lean on gold prices.  But we are not fortune tellers and we don’t know what kind of currency crisis may be in the future cards, which could send gold much higher.  We just don’t know.

In 2008, gold had a 34% correction over about 10 months.  It has lost 38% since the summer of 2011 (pre-mini-crash due to U.S. credit rating downgrade).  Long-term investors would be looking to enter gold around this level and perhaps some more when GLD gets near $100.00 or when gold gets closer to $1,060. (All emphasis is mine)

I hope this helps.”

What Do the Charts Say?

Analis terkemuka Citi, Tom Fitzpatrick, kepada King World News (www.kingworldnews.com) pada akhir Juli lalu memberikan 5 grafik luar biasa yang menunjukkan bahwa emas terus meningkat kea pa yang dia sebut dengan “The Stairway to Hell.”

Fitzpatrick juga memberikan indikasi bahwa pasar emas berpeluang mengalami peningkatan dari level-levelnya saat ini.

Anda akan membaca salah satu laporan besar yang didalamnya akan menunjukkan dimana posisi harga emas saat ini di tengah bull market-nya dan kemana akan menuju.

Berikut adalah laporan yang ditulis Fitzpatrick tersebut beserta 5 grafik emas yang luar biasa:

“While calling a bottom in anything is always a danger, it certainly appears to us that gold is finally finding a platform off of which the next leg higher may have already begun.  The long term structural dynamics which suggest a gold price closer to $3500 by 2016 remain firmly in place and we do not expect them to change anytime soon.

Before feeling that gold has in fact bottomed, though, we would like to see a (weekly) close through near-term resistance around $1321-$1338, and beyond (that level) medium-term resistance around $1522-$1532.  Such closes in our view would confirm the next leg higher in gold has begun.

We have been of the bias that the correction in gold this year was just that – a deep correction – rather than an end to the long-term rally.  As such, determining when the correction is actually over is paramount as we continue to expect gold to move towards our long-term target of $3400-$3500 by 2016 (more on this later).  While calling a bottom in anything is always a danger, it certainly appears to us that gold is finally finding a platform off of which the next leg higher may have already begun.

The recent correction actually looks very similar to that which took place in the middle of the phenomenal gold rally in the 1970s.  (As we have previously expressed, the current economic and asset market backdrop that we are going through is very reminiscent of that seen during the 1970s.):

  • After a rally where gold increased five-fold, it saw a 44% correction over 17 months (1974-76), finally bottoming 14% below the 55-month moving average.
  • After a rally where gold increased seven-fold, it saw a 39% correction over 23 months (2011-13), finally stopping 14% below the 55-month moving average.  Will we look back at this point as the bottom?

As we think through that question, there are two things to consider:

Is this really a deep correction rather than the end of gold’s long term rally? – What would we need to see to suggest the correction lower is over?  (On a side note, it is worth pointing out another similarity related to the equity market for that time period:)

When gold bottomed in August,1976, the Dow Jones Industrial Average rallied 6% over the next 4 weeks before putting in the multi-year high and correcting over 20% in the flowing 1 1⁄2 years.  Since gold has hit its recent low, the Dow Jones Industrial Average has rallied 7% over the last 4 weeks and has put in a new all-time high.  We will be keeping a close eye to see if history once again repeats.

The bigger picture dynamics for a higher gold price in the coming years has not changed (see gold and the US debt limit chart below).

The relationship is clear.  A chart using the asset side of the balance sheet for the Fed, ECB or, more recently, the Bank of Japan would look similar.

There is nothing to suggest that the trend for the US Debt Limit over the next few years is anything but up.  The debt limit is currently expected to hold through September, but after that it will need to be raised for the US Federal Government to continue to operate — (the alternative is some fairy tale scenario where the Federal Government reduces its annual budget deficit to zero going forward – given that it is usually in the hundreds of billions of USD a year, and that a simple reduction of $85 billion this year caused an uproar, it is hard to see that happening)….

“We have been of the view that gold still retains value as a “hard” currency.  In an environment where currency depreciation, though not explicitly stated, continues to be viewed as a positive by central bankers and politicians, we prefer to own gold to any fiat currencies.  KWN note:  (The gold and US debt projection chart below was described by Fitzpatrick as “The Stairway to Hell.”)

Continuing with the overlay of gold and the US Debt Limit, we assume that the relationship between the two will continue to hold going forward.  While there is no guarantee of where the US Debt Limit will be in a few years, a lot of “considered opinion” suggests it will be closer to $22 trillion.

At this level, gold would be around $3,500. The below charts further support this price target…

When gold rallied in 1970-1980 it went from $35 to $850 (It multiplied over 24 times).

However, in looking at our long-term target for gold and comparing it to this 1970’s period, we truncated our expectations (A 24 fold rally from the 1999-2001 lows of just over $250 would suggest over $6,000 for Gold).  Why did we reduce our expectations?  While the reasons for gold going up are (in our view) as strong if not stronger than that period (hard currency), the final move in that trend was “event driven.”

On December 27, 1979 the Soviet Union invaded Afghanistan and the gold price surged from the pre-Christmas level of $473 to a peak of $850 by January 21, 1980.  If you exclude that move, then gold had multiplied by a factor of about 13.5 from the start of the uptrend at $35 in 1970.  A 13.5 fold multiplying of gold from the $254 low in 2001 gives us a price around $3,430 — (Very similar to what we would see if gold first went to $1,260 in a move like 2008 and then saw a move like 2008-2011).

As previously mentioned, within this bull market gold had a severe correction in 1974-1976 as the equity market recovered back towards the 1973-1974 pre-crash peak.  (This time we have managed to overcome the 2007 peak but it has taken twice as long and has needed zero interest rates, multiple QE’s and $trillion deficits.  Is that a better or worse performance than the 1970’s ????)

Ultimately, one of the catalysts that led to the acceleration in the move higher in gold was when the equity market rally of 1974-1976 peaked and corrected lower by more than 20% over about 18 months.  Our expectation of an equity correction of greater than 20% starting later this year may once again prove to be the necessary catalyst to send gold soaring once again.

Until then, there are some important levels worth watching on gold which could further point to this correction being over…

The first thing we would want to see to suggest the recent downward trend is over would be a break (weekly close) above resistance around $1321-$1338, where the downward channel top converges with the 55-day moving average and the April and May lows.  It is worth noting that the 55-month moving average (referred to in the first chart on page 1) is currently at $1380, and a close through there on a monthly basis would further be bullish.

Should we see such a break, the 55-to-200-day moving average gap dynamic, which is very stretched, would suggest a move back towards the 200-day moving average, (which is) currently around $1550.  This moving average is slowly converging with important resistance (previously support) levels around $1522-$1532 which held well in 2011 and 2012 — (This was also the level which, once broken in April, opened the way to the recent lows during the same week that the S&P overcame the 2007 peak)).

A break through those levels, if we see them, would be in our view the final nail in the coffin to the deep correction in gold and would suggest we have resumed the multi-year upward trend towards $3400-$3500.”

Agar tetap ceria berikut adalah sebuah gambar lucu untuk Anda.

Selamat menikmati akhir pekan yang indah …

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 23 Agustus 2013

Categories: Emas Tags:

Apakah Ada Manipulasi di Pasar Emas?

August 21st, 2013 No comments

“I’m not given to making outrageous or unverifiable claims about gold or silver, although that seems increasingly to be the norm in some Internet gold and silver circles; one breathless and stunning claim after another. I must tell you that I find such claims and stories distasteful and unprofessional and I try to distance myself from those making them. Even though I am the one making what seems like a breathless and stunning allegation here, I can hardly comprehend the significance of JPMorgan having cornered the COMEX gold market. To my mind, this is the most important development in the gold market in my working career. To put this in proper perspective, the last great gold market corner was about 140 years ago in 1869.”

Silver analyst Ted Butler, 10 August 2013

“The Roosevelt plan in the 30s was to tell everyone that the banks were safe and to return their gold. He then took the gold and proceeded to devalue the currency. In our era, the confiscation of the gold has been accomplished through price suppression. The suppression scared domestic investors away from metals as well as causing people to give up the one asset class that has a chance of protecting them from the coming devaluation.”

– Robert Fitzwilson, founder of The Portola Group

Saya tidak akan berpanjang kata di awal laporan ini, karena ada laporan yang sangat menarik untuk Anda baca.

Mungkin di antara Anda mengetahui bahwa sudah sejak lama ada manipulasi di pasar emas. Jika Anda ingin memperoleh analisa mendalam tentang manipulasi tersebut, maka saya sarankan Anda mengunjungi www.gata.org

Sebagai informasi. GATA atau Gold Anti-Trust Action Committee adalah sebuah organisasi yang memiliki dedikasi untuk menyelidiki dan membuktikan dugaan bahwa jumlah emas yang dimiliki da diperdagangkan oleh bank-bank sentral dunia, bank-bank emas dunia dan bursa berjangka terlalu dilebih-lebihkan dan itu adalah skema yang sama yang digunakan oleh London Gold Pool (yang kini sudah tidak ada lagi) untuk menjaga agar harga emas tetap rendah.

Saya pun berpikiran bahwa manipulasi ini dirancang untuk merusak sentimen di kalangan investor dan para pemburu emas, serta menghentikan arus dana ke pasar emas dari warga masyarakat menengah.

Singkatnya, memang harga emas tidak diinginkan untuk naik – setidaknya untuk secara cepat – karena itu akan memperlihatkan betapa rapuh dan kacaunya sistim finansial global.

Laporan-laporan yang ada di bawah ini masuk dalam kategori WAJIB DIBACA, terutama bagi para investor yang belum menyadari fakta bahwa pasar emas bukanlah pasar bebas.

Yang pertama datang dari Lawrence Williams, yang telah berkecimpung di sektor pertambangan, baik secara teknis maupun finansial, selama lebih dari 40 tahun dan saat ini menjadi General Manager dan Editor Director di Mineweb.

Menurutnya sungguh tidak masuk akal jika permintaan besar-besaran di pasar fisik emas tidak mempengaruhi harganya setelah para trader emas berduyun-duyun masuk pasar.

Dan seperti dikatakannya dalam laporannya bahwa Mr. Spock pasti akan mengatakan hal yang sama tentang pergerakan harga emas saat ini, yakni tidak logis.

Mr. Spock adalah tokoh dalam film Star Trek yang berasal dari planet Vulcan yang sangat mengedepankan logika di atas emosi. Untuk jelasnya mari baca laporannya di bawah ini:

“Star Trek’s fictional Mr. Spock would have had huge difficulty understanding the recent movements in the gold price. For those unfamiliar with the long running TV series and a number of subsequent films, Spock was from the planet Vulcan whose inhabitants eschewed emotion in favor of logic – and there certainly is little logical about the recent path of the gold price.

The world is very much aware of the enormous demand which sprung up for the precious metal following its mega dip in price of mid-April, which has seen demand for physical gold surge enormously virtually throughout the world, although China appears to be the epicenter of this unparalleled take-up of the metal.

What was not immediately apparent was that China’s imports through Hong Kong – believed to be the principal route by which gold bullion reaches the Middle Kingdom – had already been increasing dramatically in the first three months of the year, culminating in imports of 223.5 tons in March alone.

While the above is a gross figure and does not take into account metal which may have come back into Hong Kong from the Chinese mainland – reckoned to be perhaps 90 tons – even the net amount suggests an annual uptake of around half of all global gold production extrapolating that amount over a full year. But by all anecdotal accounts the volumes flowing into China in April will have been many times higher than the March figure. There was some talk of 300 tons of gold being purchased over a 2 or 3 day period immediately after the big price fall for example!

Add to that anecdotal reports that there were similar huge surges in demand for physical gold in India, Dubai and many other countries – indeed also in Europe and the U.S. if not worldwide, and of the difficulties major mints producing gold coins, wafers, bars etc. had in meeting demand, and we shouldn’t be too surprised if it turns out that global gold demand in April alone may even go a long way towards accounting for the total output of newly mined gold for the full year – an output which may even be on a decline ahead as new projects are cancelled and capital programs cut back in view of the lower gold price levels currently prevailing.

Now the gold bugs of this world – and perhaps the gold permabears – represent the emotional approach to gold price prediction.  They either profoundly believe, or disbelieve, in the place of gold in today’s economic environment and no amount of logic pointing to an alternative is likely to sway their views.  But the latest demand for physical metal does definitely suggest there is something logically wrong with the way the free market in metals is operating at the moment.  When demand dramatically exceeds new supply, then economic logic suggests that prices rise accordingly, but this is just not happening. Even the sell off out of the big GLD gold ETF is not nearly significant enough to affect what should be a rising gold price.

All this gives more and more credence to the GATAs of this world who genuinely believe that the gold price is suppressed by governments, some central banks and their bullion bank allies. Sales of paper gold to suppress the futures market do seem to be key to the current price patterns – and the amounts of money (admittedly paper again) which are required to do this would seem to suggest some kind of ‘conspiracy’ to keep the gold price under control as an economic weapon. Given that current global economic policy appears to revolve around ignoring debt and hugely increasing the money supply – to infinity as Jim Sinclair would state – then perhaps unlimited money is also being put into gold price control given that so many see the price of gold as an indicator of economic and monetary strength (particularly of the US dollar), or otherwise.

The question facing the gold investor is how long this can go on – or perhaps at what point do those who may be exerting some control relax their position and allow the metal to rise. There does come a point where the controls becomes such a nonsense that they may be self defeating.

That some central banks are increasing their gold holdings suggests that not all the powers that be believe that this situation can go on forever. At some stage the controls will be relaxed and gold will take off again, but that may not be until a genuine end to the global recession becomes apparent which still looks to be a long way off – or some of those global powers which maintain a belief in gold (Russia or maybe China would seem to be the obvious candidates here) make their own move to end the current gold price pattern  – but there are so many global political angles to take into consideration before so doing that this may also be some time away.

Mr. Spock would not understand. Nor does the writer!”

Pada 21 Juni lalu, Keith Barron, yang berkonsultasi dengan sejumlah perusahaan besar dunia dan bertanggung jawab atas salah satu penemuan emas terbesar dunia dalam 25 tahun terakhir, mengatakan kepada King World News (www.kingworldnews.com) bahwa kita berada di ambang terakhir peperangan untuk menekan harga emas (dan juga perak), yang difasilitasi oleh perdagangan derivatif.

Dia juga menjelaskan apa yang terjadi dibalik peperangan emas (dan perak), sambil berbagi kisah luar biasa mengenai ayahnya yang adalah seorang pemburu emas sejati:

“I’ve done some calling around to key contacts around the world regarding this gold and silver smash, and again it has to do entirely with the paper market, with options, and with large entities utilizing derivatives.

What’s being done here is criminal, but there won’t be any investigation by the SEC, CFTC or the powers that be because they are sanctioning it.  King World News often talks about a ‘War going on in the gold and silver markets,’ and people should remember that this is in fact a war.  It’s a war to destroy the psychology of people invested in this sector.  To destroy them mentally….

This is a manipulation of the paper market, not of the physical market.  Gold is still being looted from the ETF’s such as GLD, and physical gold continues to hemorrhage from Western central bank vaults to Eastern vaults.  If they are selling in places like the U.S., you can be sure they are buying in places like Shanghai.  That’s where your physical gold is going to end up if you are selling today, is China.

We have already seen 6 or 7 of these types of declines since 2002, even though this one has been particularly long and brutal, but investors in the sector have to remain mentally tough and hang in there.

This is all part of a desperate effort by the West to collapse the psychology of smaller participants around the world, and even to shake up institutional players, but the reality is there is only so much physical metal around.  Physical gold is in very short supply, and eventually this game that is being played is going to end.  This action is being forced mostly through the use of seemingly endless paper derivative-related futures selling and options.

But as key entities are called upon for the physical gold, eventually this fraud will unravel because they will not be able to deliver the gold.”

Barron also shared this remarkable personal information:  “My father was literally one of the first original gold bugs.  He started to buy gold in 1966 at $35 an ounce.  I have a receipt from one of the banks where he bought a 400 ounce gold bar back in 1966, and he paid $35 an ounce.

My father had a wife and four kids.  He was not an economist, but he went ahead and accumulated gold because he saw the amount of money being spent on the Vietnam War by the American government, he saw inflation going up and he knew that eventually the gold price would soar.

For many years afterwards people said to him that he was, “crazy.”  Even during the late 1990s, when tech and biotech was booming people told him he should have sold his gold because he missed that whole bull run.  But he said to me and to others, “Keith, that’s not stuff that I understand and I’m not going to play in it.  But I understand gold.  I know I can put some gold in my pocket, walk out the door, that it’s tangible, and it’s mine.”  My father would tell me, “Nobody is going to take away the value of the money that I worked so hard for during my life to accumulate, through inflation.”

That’s why he was an investor in physical gold, right up until the day he died two years ago.  This is the sort of approach and mental toughness that investors need to take when they are in a war like this.  You don’t go and trade out of gold and try to time the market because JP Morgan or Goldman Sachs decide they are going to take down the price by $70 to $75 in order to try to scare you out of the market.

So investors have to hang in there and weather these lows.  We have seen this all before.  And who really gives a damn about what Bernanke says?  The Fed is buying up $85 billion worth of bonds every month.  The world has witnessed an unprecedented amount of money creation and at some point it’s going to have an impact.

It’s going to create massive inflation and the gold price is going to soar. The Fed and Western governments can’t defy the laws of Mother Nature or the laws of economics.  They can only manipulate in the short-term.  Whenever markets are being manipulated by governments, eventually they break free and they break free in a very hostile way.  The bottom line is we are going to see the price of gold many thousands of dollars higher.”

Barron also added: “I have the strength and the wisdom taught to me by my father and I have been a believer and on the right side of the equation since 2001, and I’m sticking to my guns.  I don’t give a damn what the bullion banks and Western central planners do in the short-term to manipulate these markets in the final stages of this churn.  I’m sticking with the physical gold just like my father.  I can guarantee you there will be a catalyst to send the precious metals to new highs.  There is going to be a powerful catalyst and it’s going to happen sooner rather than later.”

Terakhir yang tak kalah penting adalah Theodore Butler, salah satu favorit saya, yang menganalisa secara komprehensif manipulasi di pasar emas belum lama ini dalam sebuah laporan yang menarik yang berjudul Cornering the Gold Market:

“For the past few weeks I have been harping on JPMorgan’s massive long position in COMEX gold futures, stating that nothing comes closer in importance for the price. There has never been a case where a market corner wasn’t the prime price determinant. Preventing or eliminating market corners is the number one priority under commodity law. A market corner is the antitheses of how a free market is supposed to operate. A series of market corners and manipulation in the early part of the last century (the Jesse Livermore era) was what led to the formation of commodity regulation in the US in the 1930’s. It’s bad enough when entities such as the Hunt Brothers or the rogue copper trader from Sumitomo cornered markets; but it’s a whole different level of badness when the most important US bank corners a market, as JPMorgan has done in COMEX gold futures.

Today I would like to step back a bit and highlight how we got to the outrageous position of JPMorgan cornering the gold market. Regular readers know that I have pinpointed JPMorgan as being the prime manipulator in gold and silver for going on five years, following the revelation from the federal commodities regulator, the CFTC, that JPMorgan inherited the massive concentrated gold and silver short positions of Bear Stearns in March 2008. That, plus verifiable data from the CFTC, in its published Commitments of Traders (COT) and Bank Participation Reports, clearly confirm my allegations of a market corner by JPMorgan in COMEX gold futures.

 

This may seem hard to believe, but JPMorgan’s current corner on the COMEX gold market is the second market corner in the gold market by this bank in the last nine months and among many prior corners over the past five years in gold and silver. JPMorgan is a serial market manipulator and now swings both ways in cornering markets; usually on the short side of markets until the current long corner in gold.

Based upon COT and Bank Participation Reports data, last December 4, JPMorgan had a net short position in COMEX gold futures of approximately 75,000 contracts. This position represented 20.5% of the true net open interest on that date (once 68,648 spread contracts were removed from total open interest of 434,416 contracts). On that date, the price of gold was $1700.

While it is difficult for many (including the CFTC) to grasp the concept that a corner could exist on the short side of the market, surely no one would argue against a 20.5% concentrated share of a major regulated futures market by a single entity would constitute manipulation and a corner.

It was this corner on the short side of COMEX gold futures by JPMorgan that provided the incentive and led to the subsequent $500 decline in the price of gold into the end of June. On the historic price decline in gold over the first half of 2013, JPMorgan booked profits on their short side gold market corner (of over $2 billion in my estimate) and continued to rig prices lower in order to establish their current long side corner of 85,000 contracts, or 25% of the true net open interest in COMEX gold futures (minus spreads).

You can’t go from being 75,000 contracts (7.5 million oz) net short to 85,000 contracts (8.5 million oz) net long in an instant or in a week or a month. You can’t snap your fingers and buy the equivalent of 16 million oz of gold, regardless of whether you have the money to leverage derivatives with a notional value of $25 billion. It took JPMorgan nine months to buy 160,000 net COMEX gold futures contracts (16 million oz), at an average monthly rate of around 18,000 contracts (1.8 million oz) from Dec 4 thru today.

In a nutshell, a market corner is determined by the size of the position of the corner relative to the total market. In hundreds of previous articles I used the term concentration; but it seems to me that corner is a better description. What percent of a market is large enough to constitute a corner? Like pornography, a reasonable person should recognize it when he sees it. A good place to start is by comparing a concentrated holding relative to other markets, relative to the same market historically, relative to regulatory guidelines and relative to commonsense.

Large and active regulated futures markets (with several hundred thousand contracts of open interest or more), like COMEX gold, NYMEX crude oil, CBOT corn or CME e-mini S&P futures should have relatively low levels of concentration on either the long or short side, say below 20% and closer to 10% by either the 4 largest shorts or longs. Among such large markets, only COMEX gold futures is above all the others with a long side concentration three times larger than for corn or crude oil. On an historical basis, the current concentration on the long side of COMEX gold by the four largest traders has never been higher than it is now, either in gold or in any other comparable large market.

Even though the largest concentrated gold long trader, JPMorgan, succeeded in derailing the imposition of speculative position limits (the one known cure for a market corner), we have a firm sense for what the CFTC intended as the maximum percentage of the market to be held by any one entity. The agency’s proposed formula called for a 2.5% to 3% effective limit on what any one trader held in large futures markets before it was overturned in court. Therefore, JPMorgan is holding a concentrated position in COMEX gold futures ten times or more larger than the proposed limits of the CFTC.

Since the names of individual traders are not given in COT or Bank Participation Report data, it could be argued that JPMorgan is not the bank holding a corner in COMEX gold. That matters little because someone holds the corner. The four largest traders are holding nearly 42% of the COMEX gold futures market on a true net basis (after spreads are removed). Even if you assumed an equal division of the 42% true net market share by the four largest traders, at more than 10% each, the individual positions would still constitute a corner on their own. It would also involve an obvious conspiracy among these holders since the positions were established simultaneously. Besides, if it’s not JPM holding a 25% share, then JPM management has to be considered irresponsible to its shareholders for allowing the manipulation allegations against the bank to go unchallenged.

And one last thing – the fact that JPMorgan swung from a short side corner in COMEX gold in December to a long side corner now, it puts a lie to all the stories that the bank is only hedging for clients. What possible hedging would call for a short corner on the market being reversed to a long side corner in nine months?

Market corners are very big deals and it is for good reason that they serve as historical mile markers. In many ways, the current COMEX gold corner shares obvious similarities with past market corners in terms of the existence of a controlling market share, but it is the differences that make the current gold corner very special. For one thing, all previous market corners had ended or were ending before the world even knew there was a corner in effect. As far as public awareness, all previous market corners had to be reconstructed after the fact. Here, we have a ringside seat (unless my analysis is completely off) on a market corner that is unfolding in front of us in real time. This is unique beyond imagination.

What is also very different about JPMorgan’s current gold market corner is that it is visible and provable in the CFTC’s own published data. To my knowledge, COT reports didn’t exist at the time of the Hunt Bros silver manipulation and the Sumitomo copper manipulation mostly involved trading on the LME, not the COMEX. The current gold corner by JPMorgan is not being discussed because of leaks from insiders, but from US Government data. Let’s face it – it’s not possible for me to be more of an outsider.

Past market corners pitted the regulators against outside speculators or rogue traders. I don’t recall any previous market corners being resolved where the industry insiders and particularly the exchanges were at odds with the CFTC. It was usually the regulators, the exchanges and the industry insiders all on one side and those accused of the corner (like the Hunt Bros) on the other side. In the current gold market corner by JPMorgan, the COMEX (owned by the CME Group) is just as much at fault for allowing it to develop. Were the CFTC to move against JPM, it would result in a decidedly different matchup than seen historically.

There can be no question that the price pattern over the past nine months has benefitted JPMorgan immensely. A short corner on the gold market at $1700 and now a long corner many of hundreds of dollars lower. Just a coincidence or strong supporting evidence of manipulation? Either JPM is the luckiest trading entity in history or they are exerting undue control on the gold (and silver market). Establishing repeated market corners has never occurred in history, yet the data prove that JPMorgan has done just that.

Not lucky at all are the victims of JPMorgan’s repeated market corners. The victims of the successful short side corner in gold are centered on those in the gold mining industry; shareholders and employees and anyone else damaged by the deliberate price-rigging to the downside, including metal investors and states and countries dependent on tax revenue. So many damaged with benefit to so few.

A key question is why the CFTC is not reacting to the clear evidence of JPMorgan cornering the COMEX gold futures market. One explanation (that I’ve long favored) is that the agency doesn’t know how to interpret the data they are publishing. But I’m giving them paint-by-the-numbers instruction for interpreting their own data. The Commission has published data that show that the largest four traders hold 140,550 gold contracts net long and that represents 42% of the entire open interest once all spread contracts are subtracted from total open interest. The agency can confirm in a heartbeat if the largest single trader holds close to 85,000 contracts of that total in the latest COT report and whether the largest short held 75,000 contracts on Dec 4. The agency can’t reveal the identity of the trader (unless it charges a violation of the law), but it can verify or dispute the share of the market held by the largest gold long without naming the entity.

Since the explanation that the CFTC can’t correctly interpret their own data loses credence after basic instructions to them of how to do so, we are left with the more popular explanation that the agency is in cahoots with JPMorgan in some way. As a US citizen, I hope that’s not the case, although I am increasingly leaning that way. One thing that can’t be denied is that the overall tide of sentiment against big banks trading in commodities is rising. I don’t know why it has taken so long as it never made sense for banks backed by insured deposits to speculate in commodities. I’m encouraged by Commissioner Bart Chilton’s recent pronouncement to this effect http://www.bloomberg.com/news/2013-08-05/fed-…ilton-says.html but disappointed that he ignored the short corner on the gold market in December and ignores the long corner now in place. It’s time to be specific and not speak in generalities.

Perhaps the reason that the CFTC can’t see the corner in place in COMEX gold is because they are not looking. I confess; since JPMorgan turns up so often as the gold and silver price controller, I look for their involvement. I can tell you this for sure; if you look at the data through the perspective that JPMorgan is up to no good, then you can see it clearly. This reminds me of my discovery of the silver manipulation in the mid-1980’s thanks to Izzy Friedman’s challenge to explain the low silver price amidst a supply deficit.

I came to see the short side manipulation and concentrated position because I was looking for what was wrong. Same here – if you try to legitimately explain why JPMorgan was so short at the top in December and so long now after a $500 decline in legitimate terms, you’ll drive yourself mad. This is a rotten crooked bank and their actions can only be comprehended in illegal terms.

Since we are in the unprecedented position of looking at a corner in the gold market in real time with little history to guide us, no one can predict how it will end precisely; but end it will. Will it end to the upside, with JPMorgan realizing huge profits (as they did with their previous short gold corner); or will it end with JPMorgan being forced to divest of their gold corner by the regulators. Obviously, the record would suggest the former, but it’s not impossible for the regulators at the CFTC to awaken from their coma of failing to properly regulate precious metals. Certainly how JPMorgan liquidates their gold corner will be the prime influence on the gold price.

Regardless of how JPMorgan disposes and dissolves its gold corner on the COMEX, it should be good for silver. If JPM lets the gold price rip to the upside for great profit (as is most likely), I would expect silver to more than tag along for the ride. If the regulators gain some wisdom about their own data and some fortitude in going against JPMorgan’s gold corner, I don’t see the great danger for silver at current prices. After all, JPMorgan has no long side corner in silver to be ordered liquidated and we’re already below the cost of production for many silver miners.

I’m not sure what to root for. If JPMorgan is forced to divest its corner on the gold market that would be such a regulatory sea change that it would make it extremely unlikely that JPM would short aggressively on the next silver rally. I am still convinced that is the most important market consideration. A measured reading of the facts and circumstances suggests the gold corner could be the catalyst for my long-expected divorce between silver and gold prices. Make no mistake – this gold market corner seems almost from another world or time. If I didn’t see the clear evidence that it existed by virtue of the hard data, I’d swear it was impossible. Instead, we’re all going to witness how it gets resolved.

This report was sent to subscribers on August 7, 2013. For subscription information, please go to www.butlerresearch.com

What Do the Charts Say?

Sebagai lanjutan dari propaganda anti emas di sejumlah media utama, Grant Williams dari Vulpes Investment Management Singapura pekan lalu memberikan peringatan bahwa emas dan perak di pasar non-fisik sudah mencapai rekor tertingginya.

Kemudian hal ini pun memicu kekhawatiran akan terjadi default di bursa emas terbesar dunia, yakni LBMA dan COMEX.

Berikut adalah laporannya yang luar biasa disertai grafik-grafik yang menarik:

Warning – Paper Claims For Gold & Silver Hit All-Time Highs

“Until July 2012, the London Interbank Offered rate (LIBOR) was the biggest little number that nobody outside finance understood, and yet it touched the lives of virtually everybody.

LIBOR is an interest rate that gets calculated for ten currencies and fifteen borrowing periods that range from overnight to one year.  It is published every day in London after submissions from a group of major banks.  Currently, eighteen banks contribute to the fixing of US dollar Libor, for example.  The LIBOR rate is calculated by taking estimates from each of the banks, throwing out the highest and lowest four indications and averaging the remaining ten.

The resulting number itself is measured in mere basis points (hundredths of one percentage point), but it underpins a staggering $350 TRILLION in derivatives and is a vital component in setting the price on hundreds of thousands of OTC transactions around the globe every day. The wonder of leverage at work….

The daily benchmark rate, once set, is known, appropriately enough as it turns out, as a ‘fix’.

As far back as 2008, reports were swirling in the media about possible foul play and manipulation of the LIBOR market with a Wall Street Journal article suggesting that rates had been understated during the depths of the 2008 crisis. Naturally, the British Bankers Association denied there was any wrongdoing and the Bank for International Settlements backed them to the hilt, stating that “available data do not support the hypothesis that contributor banks manipulated their quotes to profit from positions based on fixings.”

Suggestions of collusion and manipulation in an attempt to suppress the LIBOR fixings were dismissed out of hand as being completely ridiculous – after all, how could EIGHTEEN banks collaborate in such a vast market without it leaking?

Fast forward four years and the Libor Scandal has a Wikipedia page all of its own, full-blown investigations are taking place in some ten countries (including a criminal investigation by the Serious Fraud Office in the UK) and the total fines levied to date at the offending banks are measured in the billions of dollars.

Now, the CFTC has been handed evidence of possible manipulation of something called the ISDAFIX, which is the benchmark for interest rate swaps, amongst a group of 15 banks.  Once again, this is a rate that affects hundreds of trillions of dollars of interest-rate derivatives – an enormous amount of which have pension funds as a direct counterparty.

CFTC Commissioner Bart Chilton is quoted as saying that:  “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry.”

But … and here’s where I have a problem … mention possible manipulation and price suppression in the gold market amongst the so-called Bullion Banks – a far smaller and more tightly-knit group of six household names – and you instantly have a label slapped on you and are neatly filed away into a folder marked ‘Gold bug’ – a term as pejorative as any I’ve come across.

But indulge me – a card-carrying ‘Gold bug’ – for a moment, if you will:

The gold market also has a series of daily ‘fixes’ both on the COMEX in New York and the LBMA in London and, though the scale of the leverage involved pales into insignificance against the vast derivatives markets layered atop LIBOR and ISDAFIX, there are still currently 42 outstanding claims on every ounce of gold remaining in the fast-dwindling COMEX warehouse stocks thanks to the availability of paper gold in the form of futures contracts (see chart below courtesy of Nick Laird at sharelynx.com) which is by far an all-time high.

When you throw into the mix the fact that, in little more than a few months since the LIBOR story blew wide open, regulators have investigated, charged and punished malfeasance amongst the price fixers (and by that, of course, I mean the banks that fix the price) and, in the process collected billions of dollars in fines, it becomes ever harder to understand why the CFTC investigation into alleged manipulation of the silver market prepares to enter a sixth year with no progress report from regulators whatsoever.

The closest we have come thus far to any signs of activity has been a recent report in the Wall Street Journal which began: “The Commodity Futures Trading Commission is discussing internally whether the daily setting of gold and silver prices in London is open to manipulation, according to people familiar with the situation.”

That’s not much to show for five years of investigation, but if that weren’t enough the article continues:

“No formal investigation has been opened, the people said.  The CFTC is examining various aspects of the so-called price fixings, including whether they are sufficiently transparent, they said.”

A much smaller market than LIBOR with far fewer participants and full transparency of far lower trading volume seems to be proving far harder to get to grips with for the regulators for some bizarre reason.  Of course, in this particular case, the interests of the major market participants and the government that empowers the regulatory overseers are somewhat aligned in that lower gold prices suit both parties, but let’s leave that aside for the time being.

Now, before I get to the point of this article and the question I want to restate, there are two more charts I want to include (again, courtesy of Nick Laird) that demonstrate the kind of anomaly that simply screams the ‘M-word’.

The first chart shows the performance of the gold price over a 43-year period when buying at the LBMA AM fix and selling at the PM fix – which in effect means you were long only during the time when the major participants (bullion banks) were actively trading in the most liquid market.  As you can see, it has been a virtually guaranteed way to see your capital dwindle as the price has been forced relentlessly lower over time.

Now we see what the chart looks like if you bought at the PM fix in London and sold it into the following morning’s fix (which in effect means being long gold overnight in the less-active markets when the bullion banks are relatively dormant):

The chances of such drastic bifurcation of trading in a single commodity over two specific timeframes within an extended period such as this are minimal to the point of obscurity.

So, given what we know about the widespread manipulation (and alleged manipulation) of supposedly sacrosanct, but vitally important benchmarks such as LIBOR and ISDAFIX amongst a group of large financial institutions in the interests of either generating profits or mitigating potential losses, bearing in mind that the bullion banks (with the exception of Scotia Mocatta) are all involved in setting both the LIBOR fix and the ISDAFIX, and taking into account that the regulators have somehow managed to gather evidence sufficient to extract ten-figure fines out of the banks found guilty of malfeasance in a matter of months but failed to even get past the point of “discussing internally whether the daily setting of gold and silver prices in London is open to manipulation”, let me ask you this:

Can it possibly be true that the prices of gold and silver are NOT manipulated?”

Di akhir laporan ini, agar tetap ceria berikut saya lampirkan sebuah kartun lucu dari Jon Pawelko, penerbit komik internet Lampoon The System yang menggambarkan kebijakan ekonomi secara humor dan sekaligus mendidik masyarakat untuk mengetahuinya:

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 16 Agustus 2013

Categories: Emas Tags:

Apakah Euforia Pasar Kini Menjadi Awal Bencana Kemudian?

August 16th, 2013 No comments

“A major boom in real stock prices in the U.S. after ‘Black Tuesday’ brought them halfway back to 1929 levels by 1930. This was followed by a second crash, another boom from 1932 to 1937, and a third crash. Speculative bubbles do not end like a short story, novel, or play. There is no final denouement that brings all the stands of a narrative into an impressive final conclusion. In the real world, we never know when the story is over.”

– Robert Shiller

“… the best gauge as to which phase a bull market is in is the matter of values and sentiment. At this time I judge sentiment to be excited and optimistic. Nobody I read or hear is talking or writing about a bear market. On the matter of values, the S&P 500 is now selling at a rich 19.29 times earnings while the dividend yield is at a micro 2.10%. These statistics compare closely with values at previous bull market tops.”

– Richard Russell

Tidak ada yang bisa menyamai pembelian aset-aset sekuritas tanpa uang yang Anda miliki – atau, lebih tepatnya, meminjam uang dari broker Anda, dengan investasi Anda sebagai jaminannya.

Istilahnya adalah buying on margin, yang semakin marak karena bursa terus naik dan para spekulan tidak mau kehilangan momentum untuk memanfaatkannya.

Selama harga saham-saham Anda terus naik maka pinjaman juga bisa ditambah. Rally bursa menambah ekspansi lebih besar portofolio Anda dengan hutang yang juga bertambah. Inilah yang bisa menimbulkan bahaya dan beresiko menjatuhkan bursa saham.

Seperti dikatakan Keith Fitz-Gerald, seorang Chief Investment Strategist pada Money Morning, “The latest figures on margin borrowing are very much a danger sign.

From a technical perspective, margin borrowing has risen to levels that we know are consistent with major corrections.

Investors need to learn to review the figures just like a big road sign. It doesn’t stop you from driving down the road. It just says ‘potential hazard ahead.’

The problem with margin is that it magnifies the risks you take. Your profit potential is huge but then so is your loss potential unless you know how to manage that risk properly.

Most retail investors simply do not understand what it is they’re getting into and they fall prey to these very seductive investment ads coming out of Wall Street that are designed for one purpose and one purpose only: to separate them from their money.”

Dan benar saja, seperti laporan dari Deutsche Bank (DB) bahwa investors have rarely been more levered than today!

Menurut DB, a MoM change in NYSE margin debt >10% has to be taken as a critical warning signal as there are astonishing similarities in the sequence of events among all crises.

As the S&P 500 just hit a new all-time high, investors might want to ask themselves when it is a good time to become more cautious.

Simply put, the higher margin debt levels rise, the more fragile the underlying basis on which prices trade; with even a less severe sell-off in equities capable of triggering a collapse.

Saya sarankan Anda untuk membaca Deutsche Bank Special Topic di bawah ini dengan seksama dan bertindak yang sesuai:

Red flag! – The curious case of (NYSE) Margin Debt

A recent survey by the Create consultancy of >700 asset managers globally, managing USD 27.4 trillion between them, found that 78% of defined-benefit plans would need annual returns of at least 5% per year to meet their commitments, while 19% required more than 8% – far higher than reasonable projections. Institutions are also taking on more risk. According to a fund manager, “a target of 5% per year can be reached but only by using […] LEVERAGE, SHORTING AND DERIVATIVES.”

This special topic focuses on the critical development of margin debt, a term commonly understood as a tool used by stock speculators to increase their winnings. Investors borrow money from brokerages to buy more stock than they could otherwise afford on their own. If the stock rises, they end up making far more money than they would without borrowing. If the stock crashes, the opposite materializes. This kind of speculation is highly alarming as a large amount of margin debt makes the market vulnerable and, potentially, highly volatile. If a drop in stocks causes nervousness for regular investors, it can cause panic among those who rely on stock gains to pay off high-interest loans on margin debt. These loans are collateralized by stock holdings, so when the market goes south, investors are either required to inject more cash/assets or become forced to sell immediately to pay off their loans – sometimes leading to mass pullouts or crashes. None of the statistics shown in this report are cause for panic considering that corporate fundamentals, like earnings, are still relatively strong. But they are worrisome. Comparing press articles around 1999/00 (NM), 2007/08 (GFC) and 2013 YTD reveals an astonishing degree of congruence between the two major equity sell-offs and today, where the discussion on margin debt embedding the peaks in equity markets takes centre stage, again.

The New York Stock Exchange (NYSE) tracks margin debt for the US market. The April 2013 figure of USD384bn marked an all-time high since records started in 1959! When netting out account credit metrics, such as Free Credit Cash and Credit Balances in margin accounts, total investor net worth just hit a record low since 2000 at USD106bn. In short, investors have rarely been more levered than today!

According to our observations, a m-o-m change in NYSE margin debt >10% has to be taken as a critical signal as we discover astonishing similarities in the sequence of events among all crises (the new technologies market around 1999/00, the Great Financial Crisis around 2007/08) and in 2013. As the S&P 500 just hit a new all-time high, investors might want to ask themselves when it is a good time to become more cautious – yesterday, in our view.

Introduction: Should we fasten our seat-belts for the zero-gravity spot in equities?

Press research can reveal fruitful facts when screening for the combination of words in any given period of time. We observe that the term margin debt offers some interesting cross roads between major financial crisis and stock market sell-offs since the 1980s. Before we go into more detail, we define what is commonly referred to when talking about margin debt.

What is margin debt? Why do global investors have to pay attention?

In its basic terms, (NYSE) margin debt can be explained as the USD value of securities purchased on margin within an account. Margin debt carries an interest rate, and the amount of margin debt will change daily as the value of the underlying securities changes. When setting up a margin account with a stock brokerage, the typical maximum for margin debt is 50% of the value of the account – a threshold that was last adjusted by the US Fed in 1974. In order to prevent a margin call (a request to raise collateral in the account), the margin debt must remain below a specified percentage level of the total account balance, known as the minimum margin requirement (or maintenance margin). Not all securities are available to be purchased with margin debt, especially those with low share prices or extreme volatility.

Different brokers have different requirements in this area, as each may have its own list of marginable securities. Margin debt levels, and their rate of change, are sometimes used as an indicator of investor sentiment because margin debt rises when investors feel good about the prospects in the stock markets. In the past, margin debt levels have peaked before market indexes reached relative peaks. When markets decline in a hurry, a large number of margin calls will usually come due, which can add to already heightened selling pressure.

Since the records started in the late 1950s, we observe margin debt tracked by the New York Stock Exchange (NYSE) rose to an all-time high in April this year.

Most interestingly, margin debt follows the pattern of exponential growth when equity markets surpass previous record historic levels and peaks ahead of the equity market, i.e. 1/2 month ahead during the “new technologies market” around 1999/2000 and 3 months ahead during the “Great/Global Financial Crisis” (GFC) around 2007/2008. As it is difficult to identify such an absolute peak, we find it useful to look at more sensitive measures, i.e. month-on-month changes. It seems as if a threshold >10% in the m-o-m change delivers meaningful signals when the sequence starts.

In this way, it is most alarming to see that the first signal lit up in January this year.

Market analysts track margin-debt activity as an indication of investors’ appetite for speculative trading. But a potential pitfall for those trading on margin is a sharp decline in stock prices, which can expose investors to margin calls, requiring them to post additional collateral or having their brokers sell their securities. That’s why high levels of margin debt can be worrisome – a wave of margin calls triggered by a sharp market correction could exacerbate the selling pressure on stocks, making matters worse.

Consequently, high margin debts show the effect of over-leveraging and mispricing of risk in our financial system. Particularly worrying in this context is the fact that margin debt is just one tool available to investors seeking leverage. Options and futures make it easier to obtain leverage as well. In other words, the record margin numbers may understate the situation. And did you know? The interest on margin debt is tax deductible in the US which adds to the incentive to lever up.

Besides, with the bond market weakening, the cost of margin debt is going up which will also trigger liquidation of this debt with an obvious impact on stock prices supported by this borrowing.

Press review: 1999/2000 vs. 2007/2008 vs. today (2013) – Does history repeat itself?

Based on a collection of press articles which were published around the key events during the past financial crises, our key finding is straight forward. Irrespective of the publishing date, the articles read alike throughout the two major crisis periods, i.e. the “new technologies market equity bubble” (1999-00) and the “Great/Global Financial Crisis” (2007-08). Most interestingly, literally the same content can be found in today’s press. Universal phrases include:

  • “A rising stock market encouraged more investors to go into debt to buy stocks, sending margin debt levels past their all-time high”.
  • “The National Association of Securities Dealers (NASD) has asked members to review their lending requirements in a sign of increasing concern that rising levels of margin debt could exacerbate a stock market plunch.”
  • “The Fed is concerned about a sharp rise in margin debt but has been unwilling to attack stock market speculation as high levels of leverage do not necessarily translate into high risk. The last time the Fed adjusted the margin rules was in 1974, when it reduced the down payment required for stocks to 50 percent of the purchase price, from 65 percent.” […] “The Fed should return to its pre-1974 policy of actively changing margin requirements in response to stock market speculation”.
  • “High margin debts show the effect of over-leveraging and mispricing of risk”.
  • “The movements in stocks cause brokerages to stop allowing customers to buy some of the volatile stocks on margin or require clients to put up more cash.”
  • “Either the market rises dramatically to make those loans good or in any down move there is tremendous selling pressure”.
  • “Until recently, most investors ignored red flags raised by regulators”.

Admittedly, with aggressive intervention from central banks following an extreme financial crisis makes judgment difficult. Critics argue, “it makes sense in this environment to lever up and to take advantage of stronger returns”; “the fact that two things move together [margin debt and the equity market] does not mean that one is causing the other”; “relative to bonds, equities appear fairly cheap”. Depending on the denominator to which the absolute level of margin debt is put into perspective, the judgment on whether critical levels of margin debt have been reached varies case by case (for example, using gross domestic product and total market capitalization).

Relative to US nominal GDP, many quotes in the financial press since the 1980s highlight the critical level of c2.25% as worrisome, a level we just crossed in January this year. In retrospect, we observe that this threshold has been useful to identify the peak in the equity market in 1999/2000 and in 2007/2008. However, it failed to deliver a meaningful signal back in 1987 (albeit marking a record high in those days). The June 2013 figure currently stands at 2.35%.

More interestingly, the ratio of margin debt relative to total market capitalization also works as a meaningful signal when using a c2.25% threshold with the noteworthy difference that the 1987 stock market crash was detected as well. As the current level stands way above this threshold, observers should be alarmed. The June 2013 figure currently stands at 2.66%.

Both the absolute and relative level of margin debt, its month-on-month changes >10% versus the equity market’s all-time record high (S&P 500) deliver an important message (apart from having adjusted any of these time series for inflation). It can be debated quite controversially, whether the current level of margin debt is to be considered as excessive, but findings in this report indicate the time has come to stop debating on pricing levels among equities (being cheap relative to bonds on the one hand side, but fairly valued compared to own historic levels on the other hand side) and start debating on leverage in the system, which has undeniably reached a critical level, once again.

Interestingly, NYSE short interest has come down in a straight line throughout H2 2012 and started to revert its trend from the beginning of February 2013 onwards when we observed the first critical warning signal of a m-o-m change in the absolute level of margin debt >10% in January 2013 vs. December 2012, leading to a level of margin debt relative to nominal GDP above the critical threshold of c2.25%.

A ‘Google Hit’ analysis reveals the awareness among actively operated websites has also increased significantly since January 2013. The recent spike in May 2013 perfectly reflects the increased awareness for this topic when data on margin debt for April was published and had marked a new all-time record-high. The matching upward trend between short interest and margin debt is inevitable.

Finally, we point to the fact that not only investors in equities are subject to this matter but also investors in fixed income products (aside from hedge funds and macro/cross asset funds). The mindset of investors in DM government bonds (especially in US Treasuries and German Bunds) has been shaped by a 30-year long bull market, as long as entire careers for some. As real yields approach the 0 threshold (at least at the lower end of the yield curve), especially those institutions with a guaranteed yield out on their products are struggling to deliver on their promises, could be/could have been inclined to lever up and turn/having turned to equity markets (depending on whether their mandate and/or regulatory framework allow them to do so).

In summary, this does not necessarily mean the peak in equities is just around the corner. It means the underlying basis on which prices trade is most fragile and, more importantly, the higher margin debt levels rise, even a less severe sell-off in equities could trigger the sequence of events outlined in detail above. A good acid test of what kind of investor you’ve become is to gauge your gut reaction to these observations. Events over the last few months show that the debate over QE tapering is not yet over and any surprise announcement by the US Fed on unwinding asset purchases might have far reaching implications against the backdrop of findings in this report. This leaves us with the hope that not all the margin calls come at once in case a sell-off in equities occurs. Gold and silver have been first in line to observe selling pressure but plenty of other assets could have to be sold down as well to meet (latent) brokerage margin calls.

Excursus: The sell-off in gold versus a change in margin requirements

Source: Deutsche Bank

 

What Do the Charts Say?

Laporan berikut, beserta grafik yang sangat menarik, datang dari John C. Burford, editor pada MoneyWeek Trader, mengenai kondisi dan perkembangan terkini pada indeks Dow Jones Industrial Average:

Is the Dow really in a big new downtrend?

August 9, 2013

In Wednesday’s email, I posed the question: Has the Dow finally turned?

Editor’s note: please also have a look at the article mentioned above as it

has two outstanding charts on the first 2 pages.

I laid out what I believe was a strong case to say that it likely has.  But since then, some doubt has crept into the picture.

My main piece of evidence for a turn is this chart shown Wednesday:

I have a five wave move down shown by the green bars with a strong wave 3. And within wave 1, there is a clear five wave pattern.

So did my best guess turn out well?

In fact, it was perfect!  And that increased my confidence level that after this five wave sequence, I should expect a relief rally – preferably in an A-B-C form before turning back down.

But in terms of trading, excellent short entries were indicated by the two pink bars.  The top one lies just underneath the minor low of wave 1.

This is a favorite strategy of mine – placing sell-stops just under a minor low in anticipation of a swift move down.  Your protective stop would be just above the wave 2 high, thus providing a low-risk trade with high probability of success.

The lower entry was on the wave 4 high in anticipation of the final move down in wave 5. The short-term profit available here was 50-100 pips, which is a decent swing trade taking less than 24 hours.

OK, so I have my five down and the next move should be up – but how high can I expect it to carry?

This is where the Fibonacci levels come into their own.

Use Fibonacci to spot the short trades

Every time you expect a counter-trend move, you should apply your Fibonacci levels to give advance warning where the rally could run out of steam. These are the levels where you would enter short trades, of course.

This is what occurred yesterday:

I had my prefect hit (on a spike) on the Fibonacci 62% level – and after putting in a clear A-B-C (green bars) and a large negative momentum divergence (red bar).

This is starting to look textbook!  And the market looked poised to move lower.

And that 62% level was another perfect place to enter a short trade.

Even at the 50% level, a trade could have been put on, giving it a little room on your stop to allow for a possible move to the higher 62% level.

All I needed now was a swift move back down to beneath the previous low – and following the end of the C wave top, that move got underway.

This was getting exciting! And was confirming perfectly my bearish stance and was helping identify Monday’s 15,650 level as the top.

Then the surprise…

But following the move down, the market sprang a surprise – and suddenly reversed back up as the support at the 15,400 level kicked back in.

That was not in the script!

Here is the current chart:

And now I can draw tramlines. They are not perfect, as I have to deal with many pigtails and one overshoot.

I like the lower one as it has several good touch points.  This means that I have more confidence in the upper line.

So a break of this upper line could mean that I may have to change my bearish view – at least put it on hold until I get more confirmation.

At times like these, when the picture in the Dow is cloudy, I like to see what other stock indexes are looking like.

Here is the Nasdaq:

The Nasdaq is an index containing the more speculative US shares, while the Dow is the index with 30 of the biggest companies in the US, and is considered a much less risky market than the Nasdaq.

Here, I have a clear five down and an A-B-C up with the C wave topping at the Fibonacci 76% retrace (compare with the Dow’s retrace to the 62% level).

So this picture seems to confirm my bearish view, does it not?

But taking a closer look at the Nasdaq chart again, there are alternative labels I can apply:

The move down can be seen as an A-B-C with a slight positive momentum divergence at the C wave low.

Now, how can I tell which picture will prevail?

If the Dow and/or the Nasdaq rallies to new highs that would definitely cancel out the immediately bearish scenario.

But if the market declines from here to make new lows for the move, that would indicate we are in third waves down – and as we know, they can be long and strong.

So my lines in the sand are the 15,650 level in the Dow on the upside, and the support at 15,400 level on the downside.

Here is the Dow chart to show how critical the 15,400 level really is:

Since mid-July, the market has respected this level as major support – note all of the touch points where every time the market has tested it, it has held.

But lines of support eventually do give way – and when this one is defeated, the move should be historic, since the line will then become a huge shelf of resistance.

Terima kasih sudah membaca dan semoga beruntung hari ini!

Dibuat Tanggal 15 Agustus 2013

Categories: Pasar Internasional Tags:

Apakah Perang Suriah Menjadi Awal Sebuah Perang Besar?

August 14th, 2013 No comments

Why of course the people don’t want war … But after all it is the leaders of the country who determine the policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship … Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”

– Hermann Goering, Nazi leader

Perang Suriah nampaknya akan semakin meningkat karena Iran – yang baru selesai melangsungkan pemilu presiden yang dimenangkan oleh kandidat moderat, Hassan Rohani – mulai mengambil alih.

The Independent melaporkan bahwa a military decision has been taken in Iran – even before last week’s presidential election – to send a first contingent of 4,000 Iranian Revolutionary Guards to Syria to support President Bashar al-Assad’s forces against the largely Sunni rebellion that has cost almost 100,000 lives in just over two years.

Iran is now fully committed to preserving Assad’s regime, according to pro-Iranian sources which have been deeply involved in the Islamic Republic’s security, even to the extent of proposing to open up a new ‘Syrian’ front on the Golan Heights against Israel.”

Jika pihak barat yang menghendaki Iran masuk dalam eskalasi Suriah, seperti memburu 2 burung dengan sebuah cluster bomb, maka Iran akan menyambut baik kehendak tersebut..

Tyler Durden dari www.zerohedge.com juga memberikan penjelasan lebih banyak mengenai proxy war di Suriah yang kian memanas, setelah beredarnya berita-berita, yang pertama adalah bahwa Russia bersikeras “it would deliver anti-aircraft missiles to Syria despite international criticism, as fears of spillover from the conflict grew” and in logical retaliation to the decision by Europe to lift an arms embargo to the Al Qaeda-supported, Qatari mercenaries operating in Syria, also known as “rebels.”

Dan berikut cerita lengkapnya, yang menggambarkan dengan sangat jelas bahwa situasi di Timur Tengah semakin serius:

This led Israel’s defense minister Moshe Yaalon to immediately signal that “its military is prepared to strike shipments of advanced Russian weapons to Syria.”

Meanwhile back in the US “the White House has asked the Pentagon to draw up plans for a no-fly zone inside Syria that would be enforced by the U.S. and other countries such as France and Great Britain, two administration officials told The Daily Beast.”

And just to make it very clear that Russia is not bluffing, it announced overnight that its four regiments of S-300 air defense systems have been deployed at the Ashuluk firing range in southern Russia as part of another snap combat readiness check of the Russian armed forces “The missions will be carried out in conditions of heavy electronic warfare to test the capabilities of the air defense units to the highest limit.”

And to think: yet another threat of a global war over some natural gas pipelines from Qatar to Europe, and a threat to Gazprom’s monopoly.

From AFP:

Russia insisted Tuesday it would deliver anti-aircraft missiles to Syria despite international criticism, as fears of spillover from the conflict grew after three Lebanese soldiers were killed in a border-area attack.

Israel warned Russia it would “know what to do” if the delivery went ahead, and Syria’s top rebel commander gave Hezbollah, the powerful Lebanese Shiite movement, a 24-hour ultimatum to stop fighting alongside regime forces.

The developments stoked tensions after the European Union decided to lift an embargo on weapons to Syria’s rebels, in a move the opposition reacted to with caution.

Syria’s regime joined its ally Russia in condemning the EU decision as an “obstruction” to peace efforts, while accusing the bloc of supporting and encouraging “terrorists”.

Moscow said it would go ahead with its plans to deliver the S-300 missiles to Syria, despite international concerns, saying the weapons were part of existing contracts.

“We consider these supplies a stabilizing factor,” deputy foreign minister Sergei Ryabkov said, adding they could act as a deterrence against foreign intervention.

Israel’s immediate response via the Guardian:

Israel quickly issued a thinly veiled warning that it would bomb the Russian S-300 missiles if they were sent to Syria, as such a move would bring the advanced guided missiles within range of civilian and military planes over Israel. Israel has conducted three sets of air strikes on Syria this year, aimed at preventing missiles being brought close to its border by the Lebanese Shia group Hezbollah.

The shipments haven’t set out yet and I hope they won’t,” Moshe Ya’alon, the Israeli defence minister, said. “If they do arrive in Syria, God forbid, we’ll know what to do.”

Russia’s deputy foreign minister, Sergey Ryabkov, argued that the delivery of the S-300 system had been previously agreed with Damascus and would be a stabilizing factor that could dissuade “some hotheads” from entering the conflict. That appeared to be a reference to the UK and France, who pushed through the lifting of the EU embargo on Monday night and are the only European countries considering arming the rebel Free Syrian Army (FSA).

After much deliberations, and unable to find the much needed “weapons of mass destruction” to justify intervention, the US is nonetheless escalating next and Obama is now said to demand plans for a No Fly Zone over Syria from the Pentagon. From the Daily Beast:

Along with no-fly zone plans, the White House is considering arming parts of the Syrian opposition and formally recognizing the Syrian opposition council.

The White House has asked the Pentagon to draw up plans for a no-fly zone inside Syria that would be enforced by the U.S. and other countries such as France and Great Britain, two administration officials told The Daily Beast.

The request was made shortly before Secretary of State John Kerry toured the Middle East last week to try and finalize plans for an early June conference between the Syrian regime and rebel leaders in Geneva. The opposition, however, has yet to confirm its attendance and is demanding that the end of Syrian President Bashar al Assad’s rule be a precondition for negotiations, a condition Assad is unlikely to accept.

In April, Joint Chiefs of Staff Chairman Gen. Martin Dempsey told the House Appropriations Subcommittee on Defense that the military was planning for a range of options in Syria but that he did not necessarily support using those options.

We’re prepared with options, should military force be called upon and assuming it can be effectively used to secure our interests without making matters worse,” he said. “We must also be ready for options for an uncertain and dangerous future. That is a future we have not yet identified.”

And finally going back full circle, Russia announced overnight that its four regiments of S-300 air defense systems have been deployed at the Ashuluk firing range in southern Russia as part of another snap combat readiness check of the Russian armed forces, the Defense Ministry said. From RIA:

The regiments were airlifted on Thursday by military transport planes to designated drop zones where they will carry out a variety of missions simulating the defense of the Russian airspace from massive attacks by “enemy” missiles and aircraft.

The missions will be carried out in conditions of heavy electronic warfare to test the capabilities of the air defense units to the highest limit,” the ministry said.

A total of 8,700 personnel, 185 warplanes and 240 armored vehicles are involved in the three-day exercise, overseen by Col. Gen. Vladimir Zarudnitsky, head of Russian General Staff’s Main Operations Directorate.

Surely all of the above is very beneficial for future global GDP prospects.

Finally, here is the Russian S-300 system causing Qatar gas pipeline plans global democracies so much consternation:

Terakhir yang tak kalah penting adalah Brandon Smith dari Alt-Market blog yang menulis artikel yang sungguh menarik yang berjudul The Terrible Future Of The Syrian War.

Artikelnya ini wajib dibaca oleh mereka yang peduli terhadap kemungkinan implikasi dari konflik yang memanas ini, dan mungkin akan menyebar ke negara lain di wilayah tersebut:

The last war America fought openly through proxy was the Vietnam War. The idea was not necessarily “new”; General Smedley Butler’s exposé on his career as a conqueror-for-hire, titled War is a Racket, uncovered a long history of bloodshed by U.S. government and corporate interests in third world countries designed to destroy sovereign nations and plunder their resources. This was done through the use of mercenaries for hire, military men acting covertly or guerrilla forces with a pre-existing agenda supplied through back channels.

After our defeat in Vietnam, our government set forth on a program of private warfare. The “School of the Americas” was formed, also known as the School of Assassins, in Fort Benning, Georgia.  The combat academy churned out some of the most unstable monsters in third world politics.  The U.S. trained and conditioned agents for violent social change and military overthrow, who were then implanted around the world (mostly in Central and South America).  These agents then initiated war fever in the name of cementing U.S. interests around the globe.  Their horrifying methods were seen as a means to an end.

The sad and disturbing reality is that most wars fought by our country over the course of the past century have not been fought on principle. Instead, they have been fought for profit and for the consolidation of power and oligarchy.

Vietnam was a break in the tradition of secret puppet conflicts, sending the U.S. into the realm of openly admitted proxy. The establishment wanted the American people to know that we were supplying funding and weapons to the South Vietnamese nationalists, meddling in a civil war which had absolutely no bearing on U.S. international relations or domestic policy. The rationalization then was that America had to stop the spread of communism. Ironically, the communists of North Vietnam were a minimal threat compared to the elitist communists within our own borders sitting in positions of political power.

Ultimately, the Vietnam War had nothing to do with fighting communism, and everything to do with manipulating the public into accepting the concept of foreign intervention. That is to say, we were being conditioned to think of interventionism as a perfectly normal U.S. policy.

The war in Vietnam was achieved in stages. First, the U.S. aided then abandoned the government of Ngo Dinh Diem, who was assassinated during a military coup inspired partly by Diem’s despotic mistreatment of the Vietnamese populace. Money was then sent to cement the power of the military junta in the name of countering the rise of the communist North. Soon, weapons and heavy ordinance were being shipped to the South. Then, U.S. “advisors” were sent to train South Vietnamese soldiers.

Full intervention was successfully avoided by the John F. Kennedy Administration until his assassination, after which President Lyndon B. Johnson launched into a full-spectrum U.S. invasion which the mainstream referred to as a “police action.”  This invasion was facilitated by the “Gulf of Tonkin event”, which is now openly admitted by officials of the day, including Robert McNamara, as a false flag incident entirely fabricated by the U.S. government in order to engineer a validation for outright war.  Simultaneously, Chinese and Russian interests began supplying the North, though their involvement never officially led to boots on the ground.

I rehash this history because I think it is important to note that the Vietnam theatre seems to have been recycled in Syria today, though the cast of characters has been rearranged slightly. This time, the U.S. and Europe has supported the insurgency. The government of Bashar al-Assad has been cast as the “villain”. Russia and China are now playing the role of mediators and peacemakers, while the West now sends men like Senator John McCain to throw money and weapons into the hands of a rebellion permeated with members of Al Qaeda, who decapitate and eat the hearts of prisoners on video, and who, last time I checked, were supposedly our enemy.

The process and escalation of the conflict has been very similar to our adventures in Southeast Asia. Money has been openly sent to the rebels. Weapons have likely been covertly sent (evidence suggests that this program was perhaps a part of the reason for the Benghazi incident and subsequent cover-up). Now, certain parties within the U.S., Israel, and the EU have suggested open armament of the insurgency, while destabilization of the region is blamed on Assad by the Western media.  A false flag event seems to have already been fabricated in the form of a chemical weapons attack.  Samples of a particular Sarin gas incident have allegedly been collected by French journalists from the La Monde newspaper, and have been supplied to the UN.

The UN of course has identified the samples as Sarin and has immediately led the public to believe that the Syrian government was involved, though they have been forced to acknowledge that the insurgents may also have access to similar chemical weapons.  My question is, who the hell is La Monde?  Are we really supposed to believe that random embedded journalists with no agenda have supplied the UN with substantial proof of chemical weapons by the Assad regime? Where are these samples?  Where were they taken?  Where is the proof that they were taken during a combat incident?  I smell an Iraqi setup special all over again…

In response to the accelerated armament of what many now consider an entirely fabricated revolution, Russia, Iran, and Lebanon have offered aid to Assad. Russia has supplied Syria with weaponry for years, though shipments have increased in recent months, including a new shipment of S-300 anti-aircraft missiles which has infuriated Israel (Israel has claimed it has no intention to escalate, even thought it has twice used airstrikes within Syria’s borders — their anger over S-300 shipments only shows that they intend to continue such aggression).

Iran has a longstanding mutual defense pact with Syria and has stated that any further direct incursions by the West will result in Iranian involvement (though I think it likely that they are already involved sending arms and advisors of their own). Lebanon has supplied actual ground troops to Assad through Hezbollah. They are aiding the Syrian army in what appears to be a successful campaign against the insurgency. Hezbollah was very effective in repelling an invasion by Israel in 2006, causing the United Nations to step in to provide face-saving resolutions and an excuse for Israeli retreat. I believe their involvement in Syria will be a game changer.

I have been writing and warning about Syria’s potential as a catalyst for an expanded global war for years, long before most people had ever heard of Assad, and much of what I have predicted in the past is now coming true. Whether you believe the Assad regime is good or evil, it is important to realize that our government’s involvement in the region has nothing to do with Assad. This conflict is about setting off chain reactions in the Middle East, and, perhaps, even triggering a world war. You can read more about this in my article “Syria And Iran Dominos Lead To World War.”

Using Vietnam and other proxy wars as a reference, here is how I believe the war in Syria is likely to progress over the coming months:

  1. Heavy weapons will be supplied to the insurgency, including anti-aircraft weapons, leading to increased casualties, especially civilian casualties.
  2. Assad will respond with expanded and deadly airstrikes and ground troops will advance with the aid of Hezbollah.
  3. Iran will begin openly supplying arms, and step up covert supplies of advisors and ground troops.
  4. Russia will increase arms shipments even further, including anti-ship, anti-tank and anti-aircraft missiles in order to dissuade U.S. and Israeli interests from sending their own forces into the area.
  5. Syrian insurgents will begin losing ground quickly. The UN will offer to “mediate” a ceasefire, but this will only be designed to allow the insurgents time to regroup, and for the U.S., EU and Israel to position themselves for attack.
  6. The UN ceasefire talks will be a wash, if they even take place. Israel will begin regular airstrikes in the name of stopping Iran and Hezbollah from interfering in the war, or to stop them from obtaining “chemical weapons.” The strikes will be aimed at Syrian military facilities and Syrian infrastructure. There will be many civilian casualties.
  7. Syria will respond with ground to air and ground to ground missiles. Israeli cities will see far more precise targeting than the scud missiles used by Iraq during Gulf I and Gulf II. Civilian deaths will be much higher than expected, despite common claims that Israeli missile defenses are the most advanced in the world (Israel has never faced the threat of advanced Russian missile systems).
  8. A no-fly zone will be announced over Syria, enforced by U.S. and Israeli planes, along with anti-aircraft batteries.
  9. A violent attack will take place in Israel, likely against a civilian population center (I would not be surprised if chemical weapons are involved). The attack will be blamed on the Assad government, or affiliated allies. It might be a real attack or it might be a false flag. In either case, the result will be the commitment of Israeli ground troops.
  10. I think it highly probable that Israel will be the first Western country to invade Syria. However, their involvement will immediately draw a declaration of war from Iran, and, increased ship movements from Russia, which maintains a strategic naval base off the coast of Tartus.
  11. Israel will be swallowed up in a strategic quandary, and will demand U.S. military action. The U.S. will supply that action. Combat will spread into cross-border battles in countries not directly engaged in the fight (as it did in Cambodia during Vietnam).
  12. China will respond with economic retaliation, dumping the U.S. dollar as the world reserve currency. Russia will respond by reducing petro-product exports to Europe and staging a massive naval presence in the region. From this point, all bets are off…

Now, the temptation here is for one to immediately take sides and to look at this conflict through the lens of “East vs. West.” This would be a mistake. The Syrian government has in the past acted in tyrannical fashion (though much of the latest accusations appear to be propaganda designed to lure the American public into rallying around another war).

Russia is just as restrictive an oligarchy as the U.S. or the EU. China’s society is a communist nightmare state and the average globalist’s aspiration for what they want America to become one day. Iran has many oppressive policies and is certainly not the kind of country I would ever want to live in. The Syrian insurgency is a mixture of immoral and unprincipled death squads and paid covert wet-work agents. The U.S. government is immorally supplying the cash and weapons for them to operate in the name of fighting the same kind of tyranny that is being instituting here at home.

The point is, there are no “good guys” in this story. There are no heroes; only the insiders, the outsiders, and the general public. It has been the habit of the public to ignore most past proxy wars and then flip on the patriotism switch during the rare occasions that American troops are actually deployed. Given time for adequate contemplation (as well as significant American losses), the citizenry eventually turns sour against the paradigm and demands a change. This time, however, there may be no time for such contemplation. I believe that any forward ground action in Syria on the part of the U.S. or Israel will result in a very fast moving global war.

Such a war would seem like insanity, but it serves a vital purpose for certain special interests. It would provide perfect cover for a global economic crash which is about to occur anyway, except in the midst of war, international bankers can divert blame away from themselves. It would provide a rationalization for overt domestic security and the reduction of civil liberties in the name of public safety. It would allow an excuse for a government crackdown on activist groups, who can be labeled “traitors” who aid the enemy simply by speaking ill of government policy. It would give credence to the ideology of globalization and centralized governance. The elites could claim that sovereignty must be erased and all nations must come together under a single banner so that such a “terrible catastrophe” will never happen again.

The war in Syria will not be about Syria. It will not be about the freedom of the people. It will not be about dethroning Assad or establishing democracy. It will not be about defusing violence in the region. Syria will not be the target; we will be the target — our society, our rights, our nation.

America is in the middle of the most insidious consolidation of power in history and Syria is merely a stepping stone in the game. If we cannot maintain our vigilance and allow ourselves to be sucked into the proxy war façade, the elites will get their global conflict with little to no home opposition. The globalists will win, and everyone else will lose.”

Di akhir tulisan ini ada sebuah gambar tentang pasukan Korea Utara yang kelihatannya sedang bergembira ria:

Terima kasih sudah membaca dan semoga beruntung hari ini!

Dibuat Tanggal 14 Agustus 2013

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