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HELP – HELP – HELP – we’ve just gone over the cliff …

May 6, 2011

Author: EYE-BALL Guru

roll-em

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Title: HELP – HELP – HELP –

Byline: … we’ve just gone over the cliff …

“Free Falling from the sky is an ART FORM … ”

Article by: EYE-BALL GURU

Charts supplied by:Incredible Charts Software

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If you read my GOLD – GOLD – GOLD post from earlier this week – you will now know that when the EYE-BALL GURU speaks … the world listens …

The week is ending with commodity ‘shorts’ covering some of their profits – Silver is the big loser … Gold and a host of other commodities markets also went into ‘free-fall’ – and all are now bouncing to the tune of end-of-the-week book squaring … in other words – banking profits. The A$ also had a sell off to the A$1.05 levels and has now bounced back over A$1.07 … it is also part of the yo-yo market.

When I say – ‘fell off a cliff’ – look at the Silver chart below and get some perspective on how a SILVER trader who was long must be feeling – there was no getting out of this trade – there were too many in front wanting to jump off the cliff first … please note the .382 retracement from the highs as shown on the chart … this is important … and at this level the smart trade would be to be a small buyer looking to average down to the USD$28 level with tight stops … :

Silver Price Chart

When I said on Tuesday about the USD$ being the key – well it rallied 2% in early overnight trade and that was enough for the CRB Index to also fall off a cliff – also please note the .618 retracement on this chart which sends mixed signals … correcting so sharply off that level means a few weeks of soft commodity prices before longer term predictions can be made … see the chart below for graphic examples of how sharp this correction is …

CRB Index Chart

This chart and the previous Silver chart give meaning to the ‘free falling‘ experience … but beware – you are not going to go ‘SPLAT’ on the pavement just yet – there is a neck jerker in the pile … just around the corner is the USD$ Index chart [below] – and this gives a contradictory picture … see below for the neck jerker

USD$ Index

This Chart has not been updated to reflect last night’s early action … but remember when I said that the USD$ is the key to any sell off in Commodities earlier in the week – well the whole market jumped ahead of the curve on expectation on the very sniff that the USD$ was rallying … they all saw the USD$ bottom and begin to reverse and with the added incentive – that being Global Commodities Exchange’s all lifting their Margin calls and Deposit requirements – the effect being fringe players were squeezed out.

This filtered out all but the serious players i.e. Banks and the like – and now they will be looking to buy this sell-off because the USD$ is about to continue its downward trend … [see chart above] – look at this Chart closely and tell me that the USD$ is not going lower … it is a 75% locked in we will see new lows in coming weeks/months … and that means commodities will resume their rally be it from the lower levels this correction has delivered …

The FIBONACCI retracement of .618% on the CRB Index chart was puff-cream and cherries to a chart trader … and now we’ll be looking for a new low – and then get on board for the ‘doomsday’ ride that will have everybody ‘paper rich’ in USD$’s – but when you try to cash in – you’ll need a wheelbarrow to carry the worthless paper.

The US Administration have maybe a month – 3 months at the outside to give indications to the Global marketplace fast losing patience – that they have the metal and ability to fix a host of problems to convince the world to continue to play Banker to the USD$ debt requirements – else – who is gonna fund their rollovers and new debt when the world gives the thumbs down to USD$ debt.

Rest easy over the weekend folks … next week is gonna be more of the same …..

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… DISCLAIMER …

The Author of this BLOG – The EYE-BALL Guru – does not currently hold any Licensing credentials in this Country. In a past life – he held them all – Investment Advisor – Fund Manager – Securities Trading License – Floor Trader Membership – SFE Exchange registered – Introducing Broker – and to give any Financial Advice in today’s Global Financial and Domestic Markets – the Licensing Commission hand them out to anybody without any practical knowledge or experience in the Global Marketplace.

To earn a Financial Advisors Liscence is like attending a Training course for Doctors – they give out notes that you can learn enough to passes a test – but none of it is practical experience – nobody can learn about markets from a textbook – so when I make the statements that appear from time to time as the EYE-BALL Guru – please be aware that you should always check with your local advisor before you jump on any recommendations offered here.

All opinions here are expressed as the opinions of the Author – and are not done so for the purpose of illiciting commissions or a client following – that would be illegal and have the ASIC and ACCC all chasing my tail. Please – be forewarned – get independent advice before acting on anything that you might want to do after reading this post. I know what I ‘m talking about and have been in Global Markets for 30+ years – I’ve seen the boom-bust times – lived through them – won some – lost some – and now the volatility just scares the shit outta me …

If you have a question – please post a comment or send me an E-Mail – I will give you an honest response. Please enjoy the read.

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  1. yoda
    May 6, 2011 at 4:11 pm

    OK, but your doomesday has to be qualified. I personally think the US has longer than 2/3 months before doomesday (hence the qualification), maybe 2/3 years of more of the same “pain” to show they can get it right.I call “doomesday” hyperinflation and/or a US State utility defaulting, what do you call “doomesday”.

  2. EYE-BALL Guru
    May 6, 2011 at 4:22 pm

    Starts with SOUP kitchens … a real dose of reality … it is already happening with homeless numbers and squatters … it just has not hit mainstream media yet … nobody wants to show how bad some of these cities are coping – i.e. Detriot – outter parts of LA – parts of Washington DC – Chicago etc …

    The States over there are in worse trouble than the Federal Government … so when you say 2-3 years … nobody is gonna wait that long on a slow ride to nowhere – especially when there ain’t nowhere good to go … it will be over before your know it and then someone will tell the US that we ain’t buyin’ no more … of course that f_ucks China as well … their biggest trinket buyer exited the market … it’s a TITANIC scenario … all headed to the botton …

  3. yoda
    May 6, 2011 at 4:53 pm

    I see no value in your statements. It seems that you have regressed away from what you were learning. Remember “one swallow does not a summer make”. To use your own words, blind freddie could see this weeks events.
    If you want to be constructive, tell the US Government what they need to do, “in a respectful and practical manner”, carry on like the idiot and your credability is zero and the conversation stops.!!

  4. EYE-BALL Guru
    May 6, 2011 at 5:11 pm

    You condescending WANKER –

    There is no-one smart enough on this Planet to fix the problems – but I do thank you for the inference that perhaps I do have the wisdom to form an answer …

    The answer bears enout respect to allow some research andtime so as to present a collective thought process … in fact I will do a post on this subject just to set out reason ansd cause so as you can understand … perhaps then you might understand what it is about these markets that you do not understand …

  5. Oztruth1
    May 12, 2011 at 11:27 am

    Good article. @Yoda, 2/3 years? China have just said they are going to reduce their exposure in US treasury debt by 2/3rds. The ‘fed’ are still printing money and the debt ceiling is about to be be raised (July). This is collapse by design. Goldman Sachs and their puppet Bernanke have shown no intention on stopping the slide in the $US.

    The US is a corporation and the oligarchy are finished with it. They are going to usher in a new world currency, backed by gold. Better get some? I give it a year at the most before the $US goes over the edge.

    Peace.

  6. EYE-BALL Guru
    May 13, 2011 at 1:49 pm

    Thanks Hamish – yea – the YODA is a lose cannon that shows up all over this site – just imagine him as a little budda statue you use for a doorstop and every now and then you rub his bald head for luck and to scratch his itch …

    As for SILVER – the bounce came as expected but it looks like $24-$26 on the downside is the target if the US$ keeps strengethening … call me if you want to chat …

  7. oztruth1
    May 16, 2011 at 9:16 am

    yeh I think $26 is the floor. I’m buying now and I am having trouble getting the stuff. Can’t imagine what it would be like at $26!

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    May 27, 2011 at 1:53 am

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