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The VRTrader.com VR Silver Newsletter - Monday 7/9/2012 "Tools for the High Performance Trader" Copyright ©2012, All rights reserved. Redistribution in any form is strictly prohibited. LEIBOVIT FILES | by Mark Leibovit Leibovit Files Monday, July 09, 2012 Early July Trading Top Confirmed STOCKS - ACTION alert - BULL On Friday morning I warned that a July swoon may be ahead. Equity markets reached an overbought condition and the Fourth of July fireworks show had ended. A Leibovit Negative Volume Reversal has now formed (see Leibovit VR chart for the Total Stock Market Index - VTI): http://tinyurl.com/7kflkbw And, we should be heading south to at least fill the upside gap from June 27. In the S&P 500 that would equate to 1335.00: http://tinyurl.com/6u998kc Despite my intermediate bullish market call, there could still be further downside risk ahead if the market chooses to follow the violent see-saw patterns of 2010 and 2011 during the summer months. VRtrader Platinum subscribers were advised to sell most of the Current Portfolios long positions Friday morning. In addition, we are now short the S&P 500 via an inverse ETF. It's a long ways away, but the 1267 low from June 4 is the key 'pivot' point for the market. Should that level fail to hold, we're likely to experience the equivalent of another 'flash crash' scenario which could take the S&P down to 1175. Just a warning! That said, the ESF and the PPT along with the Bank of England and the Bank of Japan have their fingers on the 'buy' button and regardless of whether Obama or Romney succeed in November markets will be pushed higher for simple reason 'to avoid blood in the streets'. Guns sales are skyrocketing and for good reason. The seeds of civil unrest in the West have already been sown and along with protecting yourself against the possibility of a financial meltdown and/or food shortages learning to exercise your Second Amendment rights is imperative! Eyes are focused on the implosion in Europe . Also, The Fed will hold its next meetings on July 31st and August 1st, with bond dealers seeing a 50% chance that Fed chief Ben "Bubbles" Bernanke will announce another QE bond buying program. Mr. Bernanke could lay down his own markers when he testifies before the Senate and House July 17th and 18th to present the Fed's outlook for growth, unemployment and monetary policy. Another key decision point for the Fed is a policy meeting Sept 12th and 13th, when officials will update their economic forecasts and Mr. Bernanke will hold his next news conference. Pushing the equity markets to new highs over the next several months is still my preferred scenario, though my Platinum subscribers I trade the market and move very quickly do not (as I did on Friday) intend to get caught on the wrong side of the market. Ringing the register and preservation of capital are my two most important strategies/. >From the VRtrader.com website here is a link to World Market Indices: http://www.vrtrader.com/vr_free/worldmarkets/index. ------------------------------- GOLD- ACTION alert - BULL Gold bulls like myself are chewing out nails waiting and watching to see if 'the boy's will succeed in taking out the recent lows in gold (1521) and silver (26) and triggering sell stops. So far, these levels have held, but something (a gut feeling) tells me foul play is again afoot. If they succeed in breaking these levels, it will be an intentional campaign to use the created weakness to accumulate physical gold and silver from those who decide to panic and sell it to them. The COMEX/CME does not make it easy to obtain physical delivery. In fact, they encourage your leave the silver in a depository where it may or may not truly exist. That said, as we know, there are two markets: the real physical market and the phony COMEX/CME market made up of mostly worthless pieces of paper that are not backed by the physical metal. The physical market is diverging from the paper market so much so that it is getting more and more difficult to obtain delivery of the physical metal . This one of the reasons the ESF and PPT and others are trying to keep the price of gold and silver low to discourage buyers! As a youngster in this business my mentor told me that the a sure way to accumulate a position is to drive prices lower by hitting bids and breaking stops and triggering sell panics. Once prices decline these smart traders are eagerly waiting under the market with their buy orders. Sell a little to gain much more. That's the motto. So, if we do see such a selling panic and if you're aggressive, you will be there with your checkbook and do some bottom fishing. I am repeating this cute video tonight on gold courtesy of Jason Hommel from the Silver Stock Report. Check it out: http://www.youtube.com/watch?v=rLdjEqGF-Yc As he says: "Share with your rich uncles, brothers or fathers or grandfathers. Forward this to busy CEOs. Share with VIPs. Share this with money managers you may know. Share with all your friends whom you care about. Share this with your mothers, share this with your wives. Share it with your sons or daughters away at college, they may learn something about the real world. Share this with your friends, and even better, share it with your enemies!" The Kitco Gold Survey released on Friday revealed that out of 34 participants, 20 responded this week. Of these, 11 participants see prices down, while 7 see prices up and 2 see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts. I am part of that survey. Because of the formation of a Leibovit Negative Volume Reversal on Thursday in both gold and silver, I am on the sidelines at this moment - though it was very tempting to purchase an inverse ETF. Due to the holiday week and travel, I decided to sit this one out. --------------------------------------------- BONDS- ACTION alert - BEAR Avoid bonds. I don't trust the issuers whether they are the U.S. Government, foreign governments or corporations. And, even if you trust them, you can get caught in a huge decline when interest rates soar. If you feel compelled to buy U.S. paper, keep it extremely short-term and watch it carefully. Overnight, bonds could become worthless. With just about every Western nation insolvent, why would you hold their bonds or any bank debt? Like the 'burning match' scenario, don't be the last one holding bonds. Sovereign debt and certainly bank debt is not sacred. --------------------------------------------- ECONOMIC CALENDAR: --------------------------------------------- MONDAY July 9 4-Week Bill Announcement 11:00 AM ET 3-Month Bill Auction 11:30 AM ET 6-Month Bill Auction 11:30 AM ET Consumer Credit 3:00 PM ET Earnings Reports: Alcoa, Yum Brands --------------------------------------------- TUESDAY July 10 Turnaround Tuesday NFIB Small Business Optimism Index 7:30 AM ET ICSC-Goldman Store Sales 7:45 AM ET Canadian Housing Starts 8:15 AM ET Redbook 8:55 AM ET 4-Week Bill Auction 11:30 AM ET 3-Yr Note Auction 1:00 PM ET Earnings Reports: Jean Coutu, Couche Tard --------------------------------------------- WEDNESDAY July 11 Weird Wollie Wednesday MBA Purchase Applications 7:00 AM ET May U.S. Trade Deficit 8:30 AM ET May Wholesale Inventories 10:00 AM ET EIA Petroleum Status Report 10:30 AM ET 10-Yr Note Auction 1:00 PM ET FOMC Minutes 2:00 PM ET --------------------------------------------- THURSDAY July 12 Weekly Initial Jobless Claims 8:30 AM ET Import and Export Prices 8:30 AM ET Bloomberg Consumer Comfort Index 9:45 AM ET EIA Natural Gas Report 10:30 AM ET 3-Month Bill Announcement 11:00 AM ET 6-Month Bill Announcement 11:00 AM ET 10-Yr TIPS Announcement 11:00 AM ET 30-Yr Bond Auction 1:00 PM ET Treasury Budget 2:00 PM ET Fed Balance Sheet 4:30 PM ET Money Supply 4:30 PM ET Earnings Reports: Cogeco --------------------------------------------- FRIDAY July 13 June Producer Price Index 8:30 AM ET July Michigan Consumer Sentiment 9:55 AM ET Earnings Reports: JP Morgan, Wells Fargo --------------------------------------------- TWITTER AND STOCKTWITS: Don't hesitate to check out my Twitter and Stocktwits account. My Twitter account name is TheVolumeMan. My Stocktwits account name is VolumeMan. -------------------------------------------- Check out my Blog - WALL STREET RAW http://wallstreetraw.blogspot.com/ --------------------------------------------- STOCK MARKET - SUMMARY The stock market fell on Friday after a disappointing jobs report, after the head of the IMF warned of a global economic slowdown, and as interest rates rise in Europe. It did recover some of its losses (about 70 Dow points or 1/3 of its earlier loss) at the end of the session, however. The Dow Industrials dropped 124.20 or 0.96% to 12,772.47, the S&P 500 declined 12.90 or 0.94% to 1354.68, the NASDAQ fell 38.79 or 1.30% to 2937.33, and the Russell 2000 sank 10.29 or 1.26% to 807.14. Technology was the biggest loser (XLK -1.48%) after Informatica (INFA -27.62%) reduced its earnings and revenue projections. Industrials were also big losers (XLI -1.34%) thanks to a slowing economy. Natural resource stocks underperformed (XLB -1.15% and XLE -1.21%) as commodity prices fell and a weakening economy means less demand. Defensive stocks held up relatively well (XLP -0.11%, XLU -0.22%, XLV -0.66%) as traders looked for safety. Breadth was decidedly negative. Volume fell and was very light as traders extended their Independence Day holiday into the weekend. -------------------------------------------- DOW TRANSPORTS - SUMMARY- Transportation stocks declined with the rest of the market on Friday. The Dow Jones Transportation Average dropped 50.62 or 0.96% to 5198.50. -------------------------------------------- GOLD - SUMMARY Gold and the other precious metals decline on Friday as the US Dollar rose and traders worried about demand amid a contracting global economy. Gold fell 21.50 to 1582.40. London Gold Pool >From Wikipedia, the free encyclopedia Jump to: navigation, searchThe London Gold Pool was the pooling of gold reserves by a group of eight central banks in the United States and seven European countries that agreed on 1 November 1961 to cooperate in maintaining the Bretton Woods System of fixed-rate convertible currencies and defending a gold price of US$35 per troy ounce by interventions in the London gold market. The central banks coordinated concerted methods of gold sales to balance spikes in the market price of gold as determined by the London morning gold fixing while buying gold on price weaknesses. The United States provided 50% of the required gold supply for sale. The price controls were successful for six years when the system became no longer workable because the pegged price of gold was too low, runs on gold, the British pound, and the US dollar occurred, and France decided to withdraw from the pool. The pool collapsed in March 1968. The London Gold Pool controls were followed with an effort to suppress the gold price with a two-tier system of official exchange and open market transactions, but this gold window collapsed in 1971 with the Nixon Shock, and resulted in the onset of the gold bull market which saw the price of gold appreciate rapidly to US$850 in 1980. Recall, gold hit an all-time record high of 1922.20 on September 6, 2011, but fell to a 6-month low of 1521.80 on December 29, which has provided good support in recent weeks. Therefore, both are ignoring short-term weakness and getting ready for a huge round of money printing to come. Gold stocks are a special opportunity because by certain valuation metrics, they are cheaper than their 2008 lows and are as cheap as they have ever been. Therefore, with the big money still long gold and gold stocks cheap -this brings a unique opportunity in the gold sector. The 12-year bull is going to continue, driven by central bank purchases, currency destruction, and the general momentum of a bull market. More at http://www.vrtrader.com