Posts Categorized: Trader Dan Norcini

Posted by & filed under Trader Dan Norcini.

Click here to visit Trader Dan Norcini’s blog…

Dear CIGAs,

Interesting recommendation by Goldman and even more interesting to see the market reaction in gold today. Can you say that someone is particularly overjoyed by the opportunity to take that recommendation?

By the way, Goldman is echoing the remarks from Chairman Bernanke the other day and repeating what my interpretation of those remarks were in this week’s comments entitled, "Pass the Juice Please".

Goldman’s views in summary can be translated as follows: Gold market weakness has been tied to the fact that the markets were expecting "REAL INTEREST RATES" to rise in light of the recent economic data showing improvement in the US economy. However, the economic recovery is not strong enough to allow for higher rates and that coupled with Bernanke’s comments that acccomodative monetary policy will be required for the foreseeable future means that gold has overreacted to the downside.

Goldman is looking for another round of QE which will pressure the Dollar and thus drive gold prices higher.

Rest assured that the hedge fund long liquidation and fresh short selling of today is being met by solid buying from Goldman’s customers.

Also, I find it EXTREMELY TELLING that the bond market cannot seem to get much going to the upside today given the fact that the broader equity markets are swooning and the US Dollar is currently higher as the risk aversion trades come back on.


Posted by & filed under Trader Dan Norcini.

Click here to visit Trader Dan Norcini’s blog…

Dear CIGAs,

In news this morning that most of the gold community was completely expecting I might add , Chairman ‘Easy Money Ben’ Bernanke announced this morning that he was concerned whether economic recovery was strong enough to sustain itself without supportive and accomodative monetary policy. Translation – near zero interest rates will remain as far as the eye can see.

Talk about messing with the heads of the Fed Funds Futures traders – they are getting beat to death by this Fed. Every single time they start anticipating a rise in the short term interest rates based on economic data releases, some one or more of the Fed governors comes down from his or her ivory tower and squashes the idea that the economy is sufficiently on the mend. Out through the front door goes the notion that these insanely low interest rates are finally going to be begin lifting.

I have said it before and will say it again – the FED IS TERRIFIED OF RISING INTEREST RATES. Do not forget these two reasons:

1.) the entire "recovery" has been fueled by an ultra low interest rate environment in which short term money is basically free for those who want to borrow it and then leverage it up for speculative trading purposes. (Think a rising stock market which has all the feel of another speculative bubble).

2.) the US federal debt is at banana republic levels and any, I repeat, any rise in interest rates, will suck more of the incoming federal revenue into servicing the cost of this debt (paying the interest on it), leaving less for the spendthrift class to buy votes with.

Bernanke and company cannot afford to have a stock market that stops moving higher because if and when it did, the entire facade of an economy on the mend would come crashing down with it.

The monetary masters have reversed the entire reason for a rising stock market from one driven higher by solid underlying fundamentals to one being rammed higher by lots of JUICE. I am reminded of that scene for the original version of the hit movie, "The Matrix", where Neo and Trinity go to resuce Morpheus from the clutches of agent Smith where they are asked what they are going to need to pull off the stunt. "Guns, lots of Guns", comes the answer.

"Juice, lots of Juice"

Posted by & filed under Trader Dan Norcini.

Dear CIGAs,

I like to term the VIX or the CBOE Volatility Index, the Complacency Index, because it is an excellent gauge of whether or not traders are complacent or fearful. The higher the reading, the more fearful or worried they have become. The lower this index reads, the more complacent or careless they generally are.

One has to go back a period of 45 MONTHS (June 2007) to find investor psychology at these levels of complacency in regards to the broad stock market as indicated by the S&P 500. I should point out that this was one year prior to the credit meltdown of the summer of 2008. It would currently seem that hardly anyone on the planet is the least bit concerned about the level of the US equity markets due to the enormous amounts of Central Bank supplied liquidity.


Click here to read the full article on Trader Dan’s website…

Posted by & filed under King World News, Trader Dan Norcini.

Dear CIGAs,

With gold and silver plunging, along with stock markets and crude oil, today King World News interviewed legendary Jim Sinclair’s chartist Dan Norcini.  Norcini told KWN what we are seeing today in the gold and silver markets is not what most people think: “People will tend to blame this takedown in gold and silver on the bullion banks.  Interestingly, I don’t think that’s the case this time, Eric.  I think what happened last Wednesday was bullion bank selling related to central bank intervention, when we had that big takedown, which was timed with Bernanke’s Congressional testimony.”

Dan Norcini continues:

“That did get the ball rolling, but once these guys create enough downside momentum and downside support levels are breached, the bullion banks don’t have to do any selling.  At that point, the hedge funds and algorithms start to do the selling for them.

On a day like this, I expect the bullion banks to be covering shorts.  They are buying back some of their shorts they put on at higher levels.  We’ve had a decade now to see their modus operandi and this has been the pattern.  We’ve seen downdrafts in gold and silver accompanied by sharp reductions in open interest and short covering from commercials.

If past patterns hold true, and I’m sure it will, we will see sharp hedge fund liquidations on the long side being met by bullion banks buying or short covering.  Remember, the bullion banks were big sellers up at the highs….

Click here to view the full interview on…