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Smart Money May Be Growing their Short Positions

ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero

I have a funny feeling the "smart money" has built up a nice short position here and as a result the market is about to "unexpectedly" decline sharply. The ideal scenario for big trading desks here is a sudden decline that panics complacent retail traders and managers into selling (or leaving their stops in to get hit).

$10 TRILLION on or about March 1?

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

20 days ahead of the Greek default the ECB will bend over to provide every last penny European banks may need, and then some, to firewall exposure fall out (since none except for UniCredit actually did a capital raise and we all saw what happened then), then all bets are truly off.

Cliff Notes Version of ZH's long ass $10 TRILLION Article

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

Naturally, if indeed there is anything even remotely resembling a €10 trillion expansion in the ECB's sub €3 trillion balance sheet, all bets will be off as the ratio of the ECB to the Fed assets, a correlation which would imply a sub parity level on the EURUSD would gut corporate earnings in the US, all merely to prevent the disintegration of the Eurozone.

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

And while this event will be welcomed by the Fed initially as it will send stocks exploding to potentially all time highs (and gold to well over $2000/ounce), it will cripple the US manufacturing model unless the Fed immediately responds in kind, and prints outright, and unsterilized, a non-trivial comparable amount. In other words, the world could very well enter the final round of global coordinated currency devaluation, aka FX war, together. Yes, that means coordinated printing by the SNB, BOE, PBoC, BOJ, etc, etc. Simply in a last ditch attempt to preserve the status quo. Which, unfortunately, after the knee jerk reaction, will fail.

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

"We do not expect the downgrade of France to have an immediate impact, but it highlights very clearly to us the ultimate issue that has to be tested in the euro area. Will Germany hold together the euro as, when and if France becomes part of the periphery?"

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

CDO and game theory analysis, we have formally modelled both statements. In the game theory, we concluded that the most likely outcome is a series of ever-deeper crises and relief rallies culminating in a definitive moment. Before that definitive moment, our analysis suggests that both core and periphery parties playing hard-ball leads to an escalation of the crisis, but not calamity. Only at the decisive moment does a “collision” in our game of chicken model lead to catastrophe. We remain convinced that the decisive crisis has not been se

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

t is not impossible that Le Pen eliminates Sarkozy in the first round, according to the polls

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

The central question, now hoving into view, is whether France and Germany, when the time comes, can co-operate. By then France may be in an embarrassingly inferior position, possibly forcing a Nationalist response that is apparently irrational when viewed externally but rational when viewed in consideration of internal incentive

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame | ZeroHedge

essage would paying the 20 March in full on Greece’s behalf give to the rest of the periphery? The last bolded sentence is precisely what we warned about last week when we said that should Greece devolve into a full out coercive restructuring, the one real question would be: "who is next?"

Neil Diamond: "(Recession) Coming to (Corporate) America"....Today!!!

ZeroHedge says....

just as two thirds of the S&P by market cap prepare to announce earnings starting tomorrow, Q4 EPS forecasts have hit the lowest they have been at in the past 12 months
it has been corporate results that have so far managed to keep the market afloat. This may be coming to an end, courtesy of a perfect storm of negative earnings preannouncements (which have soared to a ratio of 3.5x compared to positive ones; the highest since Q1 2008) together with outright coincident misses.
Because as the chart below shows, at $24.09 and pointed decidedly downward, Q4 EPS and its transition to Q1 2012 does not portend anything good for the world economy or markets.
In fact, with the EUR plunging, while the news is welcomed by German exports, the adverse impact to US companies, via FX losses and otherwise, is about to be unveiled.

Goldman Says....

While 4Q is typically the strongest quarter for earnings, estimates have fallen 9% since the summer and are now below both realized 2Q and 3Q results. This trend of revisions has existed since July, when weak US economic data along with concerns of recession in Europe and slow growth in Asia led analysts to lower estimates
In 2012 we expect margins to fall slightly to 8.7% and S&P 500 earnings of $100 while consensus expects record 9.3% margins and $107 EPS.

Is he one of the legion of commentators that will be fooled when the US shows 1 to 2% growth in 2012?

Economic Doomsday? Or Opportunity of a Lifetime? | Offshore and Domestic Asset Protection Planning for Entrepreneurs and Investors

Bobby – What about oil and gold?

Roger – Oil and gold could drop by as much as 50% before the end of 2012 as the global recession takes hold – they won’t stay there long and will provide the buying opportunity of the decade if not longer, especially for gold. Bobby – What about US equities?

  Roger – The S&P500 could drop by 30-50% because of the steepness and depth of the recession.  It may catch investors and traders unprepared.

 

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Recession or suprise! NOT recession?  What, really, will this mean for the Gold price?  Stay tuned, this is on my radar and I should begin developing an  opinion within the next couple weeks.  For the moment I am still analyzing the analyzers and I don't have a firm opinion yet.  

For the time being please refer to Mr. Moolman's work to consider prognostications such as the one above from a deeper, more historical perpective - links to the posts on this blog are here:

 

The Crude Oil and Gold Trading Room: The Moolman Prophecies: Dow 6000? or 1000? - Gold Rocketship Imminent

1973-1974:  Dow Minus 50 ish Percent, Gold Up more than 300%

The Crude Oil and Gold Trading Room: Moolman: Simple, Historical, Logical: We Need a Crashed Dow to See Highest Gold Prices


What Gold Swing Traders Need to Know this Coming Week 1/16 thru 1/20/2012

Trader Dan's Market Views

Bulls will need to push this thing past $1650 again and KEEP IT ABOVE THAT LEVEL to have a legitimate shot at $1675 - $1680, where bullion bank selling can be expected to appear.
Bulls have pressed hard using the strong physical offtake at the lower price levels as their ally and have managed to take the price over $1600 which is constructive. But they have a lot more work to do to turn this chart pattern decidedly bullish.
As noted the other day, the metal has had a strong rally off of a major double bottom on the chart near $1,535 since the last couple of trading days of 2011 to the present coming over $130 higher since then. Longs are wisely pulling some chips off of the table after watching the push higher in yesterday's session fail to attract enough momentum to keep it trading above that $1650 level.
Dip buying has been the order of the day since this rally began. We will now watch to see where this buying will resurface. There is some light support that should appear near $1625- $1620. If it does not hold there, $1,600 is the next stop.

Is the "Smart" Money Starting to Flow into Junior Miners ahead of anticipated QE Currency Destruction?

The Golden Truth

Jim Sinclair did an interview today in which he said, in reference to the move in gold and silver overnight, that "something is taking place [behind the scenes] that is not obvious."  He referenced "quiet" buying going on in the metals.  I have noticed a lot of volume coming into the extremely undervalued junior mining shares yesterday and today.  But, I would suggest that part of what is taking place is that the savvy investors who understand the difference between gold and printed fiat currency are moving printed fiat currency into the metals ahead of what is going to be big year for QE and fiscal spending, deficits and Federal debt accumulation.

SUNSHINE!


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