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Paper Apocalypse

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Possible gold scenario: Iraq campaign begins late Friday, NY time, after the markets have closed. By Saturday night, Saddam and his generals have surrendered.


What happens to gold Monday morning? Will you have the foresight to exit your mining positions on Friday -- or can you accept huge gaps down on Monday?

If the miners gap down on Monday, at least

Goldcorp shareholders will receive dividends

at the close of business of $0.025 per share.

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One of my best subscription services has Friday/Monday as the next turn date before we start heading lower in earnest from the small trading range we've been in.


I've got us projected to possibly go as low as 610 SPX in March/April... SG's got his wave counts on QQQ down about 25% from here... many other TA anal cysts project us as about to fall off a cliff.


How can we get there so fast...? Well, one possibility I've been considering:


The war with Iraq is obviously lacking worldwide support. There are some extremely large foreign investors that play our markets, and some of them have even helped "prop up" our markets in the past (e.g.- post 9/11). WHAT IF, as a way of protesting the war when it starts, these large foreign investors completely abandon our markets? Or actually make concerted efforts to drive our markets and the dollar down? I can almost imagine some of this going on behind the scenes: threats from foreign investors leading up to the war -- and when the war starts, these threats are acted upon... which of course begets more selling from our citizens. What better way do other countries have to try and influence US policy than through our financial markets? Where else are we more vulnerable?


Just a thought, FWIW. One possible way to "get there from here."

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damn the board's hopping tonight.


mark, great post - one of your screamers. LOL at every mention of sending risk into outer space or burying it in a mine in azerbaijan.


huey9 - welcome. :)


re two day war - never in hell. this isn't about kicking saddam's ass out of a country the size of a tennis court, with the assistance or tacit approval of the entire developed world.


in any case, war or not, something is going to happen. soon. you can feel it coming.

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When News Ain't Noise2/4/03


News is noise, except when it ain't. When the news on AIG broke, the rot in AIG revealed again the truth about the market. This news was of the sum and substance, the heart and soul, of what ails the markets, the economy, and the global financial system. It is an example of yet another of the festering boils of the inflamed credit bubble infection, sapping the lifeblood out of the system.


Doc talks about this, chronicles the market cycles in the usual intraday, short term, and intermediate outlooks, and tells us where this shipwreck is heading, along with hot pictures of naked stock charts, Uncle Buck and the Golden Stool. Will Uncle Buck ever get out of his sick bed? Will the Golden Stool make it to the moon? Drop by your stock proctologist's office and get the whole picture.?


Stoolies, log one in. If you're not a stoolie already, become one Now! And don't forget to join Doc during the market day in Stooltrading Beta as he plots the market's twists and turns for you, in advance yet!

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News is noise, except when it ain't.

doc, was this a follow-on remark? if so....


it doesn't matter whether the 'something' is 'news' or not. there was a something called 9/11 that precipitated/triggered/accompanied/reflected/happened in conjunction with a multi-day plunge in the major indices. nothing occurs separate from anything else, we're all hurtling along together in an infinitely complex web of oneness.


it doesn't matter what the next something is called, or whether it bears a causal relationship to the markets through designation as a 'newsworthy event'. something is going to 'happen'. part of the something will be an accelerated market decline.

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Guest AssMaster

To those who are gaming this as a repeat of 1990, there are some things that perhaps *you* should consider:


1) this time we are at risk of a huge counterattack.

2) the markets are still far more overvalued now than then.

3) we had a consensus and a coalition which supported our actions.

4) gold is in a bull market.

5) the dollar is in a bear market.


Have you considered the EW/Prechterian concept of alternation? We were more negative about the outcome last time. This time everyone *expects* an easy outcome, stocks toi rally and gold to tank. And when expectations are not met, everyone will vote with their feet.


This is why gold stocks are not performing, because everyone *expects* the POG to tank once the bombs start dropping. So, what happens when people realize the possibility that once the bombs start dropping over there, the bombs might also start blowing up in the good old U.S. of A.?

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AIG is being spun wildly. The problem isn't on the portfolio side.


"Worries about the foggy corporate profit outlook were reignited after AIG announced a massive charge of $1.8 billion to cover liability claims that have built up in recent years. AIG sank more than 6 percent and pulled other insurers down."




We know, and most serious people know the problem lies in their 'investments', but nobody has the nerve to say so.


Being a productive worker again for the last month I don't watch things so close. It seems my old favorite bellweathers, credit bubble backstops ABK and MBI have been having a spot of trouble. About damn time.


Auerback at PruBear has some comments on the familiar story




I wish I could feel a better about being right, and even making money at it.


Oh, one more thing. You know that big push for dividend tax cuts. That was a minor part of the new plan. Bush didn't annnounce the real plan. It is contained in the budget. Another $1.5 trillion of tax cutsover ten years. Hardly worth a mention really. All of course to spur investment. As if. Still, the willingness to embrace 'investment' as the saviour at this late date is touching.



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Mark, you write consistantly excellent articles on how AND why the markets are imploding. There are very few who are able to maintain incisive and informed comment day in and day out. You are one of these rare breeds.

I agree with Titus, great work.


Those Japanese salary man taking the long morning ride on the Shinbun (did they get that name from Stoolville?) are thinking should I 1. Let my 1,000,000 yen savings earn negative interest rates and become 800,000 yen by the time I retire, 2. Commit ritual suicide before my children realize I collaterilized them for a 100 year mortgage, on a home worth less than half that amount or 3. Buy gold before the Ministry of Finance starts selling yen in the toilet paper section of the supermarket?

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First a note to Ernstime-forgot to answer you last night-yes I still own Goldcorp and no you can't have it-seriously it outperformed all the majors today-it leads on the way up and on the way down. Forget you own that stock darlin it will make you a ton of money. Last nite I posted-"A huge move is coming overnite-T/A says up but my gut says down-get up early" I even sent a pm to my buddy Piles who wasn't logged on at that point. Well we had a big MOVE and gut (this time) triumphed over T/A. It was another KA CHING day as I ran up and down my ladders-how did yours work SKID-well I hope-yes I am still tits short. SIMPLE GUY is dead right GOLD'S action has squat to do with the war-but everything to do with imploding currencies and the american peso. Now we've had a great run and have much lower to go but markets are like rivers they never run straight south-so a rally is near-I think we see 834 tomorrow at some point maybe a bit lower and then we bounce-with one exception that being we are in a 3rd wave and this puppy could be so weak and beaten up that it just falls apart to new lows but I don't see the rising VIX we need for that scenario yes it could come but it better come fast-a rally shouldn't be more than a 200-250 point bounce before we decline again-just enough to relieve the Dover Sole condition-so in summing up I have reasonably tight stops and will judge what happens at the open-POG is up again and if she sings all night the straight down scenario gains credence- Protect your profits and Trade Safe! One last thing-something happened with END last nite and I for one will miss him-he is opinionated, aggressive and argumentitive as all of us are those are the hallmarks among others of a good trader-arguments should NEVER get beyond arguments.

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The BARE is thinking dark, cynical thotz.


Who talked about those huge gaps to the DOWNside, here? Did they get filled by that weird spike in the S&P after hours?


Would SNOT that spike have cleaned out nearly all stops above the close tonight?


Is there some news story that would cause markets to erupt upward in the works?


At SOME point there's going to be a desperation move to punish gold, jam both the dollar and stocks.


Would it be here, right at 1300 and 8000?

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Colin Powell's speech tomorrow will be the pivot point for gold.


The HedgeHogs are widely expected to "sell the news" in gold and cover their short hedges on the metal stocks.


So I expect a dramatic pullback in gold, but the gold shares to actually climb. When the pullback stabilizes and doesn't collapse to its old 2002 trading range, the gold share investors will finally believe that the gold move is real, and I expect the gold shares to finally break out to the upside and take out the July highs.


Silver should follow, since it is "waiting" for confirmation of the gold move.

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Those Japanese salary man ... 2. Commit ritual suicide before my children realize I collaterilized them for a 100 year mortgage, on a home worth less than half that amount or 3. Buy gold before the Ministry of Finance starts selling yen in the toilet paper section of the supermarket?

2. Japan insurance companies are different in that they pay out life insurance policies in case of suicide.


A depressing number of middle-aged, recently layed-off, salarymen have chosen this option in order to provide for their families future.


3. Last year I remember seeing lots of ads for gold bullion in the major Japanese business paper, the Nihon Keizai Shimbun. Didn't bother to ask my Japanese colleagues about it they wouldn't know . . . their wives make all the family financial and investing decisions. Those homemakers turned out to be smarter that 99% of Wall Street.


Had a good laugh picturing a Japanese salaryman "riding" the Shimbun.

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Excellent post!




You were right on the mark! You get the rubbles and #its. True master!




News is noise, except when it ain't. Love it! Now you sound like my attorney! Hu? You da man!


Wow what a rush!


This is just a blast. Too bad I have to go to my real job in a couple days.


Looked like the pig was toast. Kept waiting for the magic hand to show and didn?t see the big jam.


Closed my q putz, bought q calls, would have closed them but had an appointment with the attorney. I will go full short again tomorrow probably at close if not sooner. Can?t play like this when I?m flying. Sure is fun!


Based on what I have seen, colon bowel isn?t suppose to drop any bombshells on the united nutniks. If this is the case, I think she will run up and setup.exe for the long awaited drop to hell.


There will be no 2-day war. It will be brutal and saddamn won?t give up. I expect the sleepers to come out.


Looking at the charts, still looks like an upside move in the works. Gann center fan line is still holding, adx is starting to get into the caution range, 61.8 line is still holding. Keep in mind I am looking at the daily charts which are good for 2- 6 weeks depending on the magnitude of price movement. Weekly charts don?t look so good, storm is a brewing. Weekly are good for about 2-5 months again depending on the size of price movments.


Looks like American airlines might be following united?s footsteps.


I?m sure all of stoolies are grinning:-) They all should be. We deserve it, now preserve it!

These morons would like to get all their money back and then some, so they will push the envelope.


Tomorrow should be a real blast, so be extra careful, tight stops.



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