COT Money Flows: Custer’s Last Stand in the Bond Market?
CIGA Eric

The commercial traders continue to quietly increase their short positions as the world recognizes a "crowded dollar trade." ….

Rather than rehash, please review the following editorial:
(http://edegrootinsights.blogspot.com/2009/12/gold-bears-fear-is-contagious.html).

Commercial traders continue to take the opposite side of the "crowded dollar trade." Time window is open and the money is setting up.

COT Money Flows:

COT F&O Commercial US Dollar Money Flows:

COT F&O Nonreportable US Dollar Money Flows:

Custer’s last stand in the bond market? This could very well be "the battle" that defines the coming decade.

COT F&O Commercial Long Bond Money Flows:

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Jim Sinclair’s Commentary

A report from the trenches.

Dear Mr. Sinclair,

Attached is a file I scanned from this months STAFDA newsletter.  STAFDA is the Specialty Tools & Fasteners Distributors Association and counts more than 3,750 members and serves primarily what would be considered the "industrial" sector of the construction industry.  I will let the statistics speak for themselves as they are absolutely horrific in my analysis.

If my business here in New York is any indication then the economy is far from experiencing any sort of even temporary recovery.  Our sales trend through the end of August was averaging an approximate 12% year over year decline.  September actually say an up-tick in business to the tune of nearly 15%.  However that is where the goods news ends, October and November were off nearly 25% and December is running down over 30% thru numbers I looked at this morning.  Our customers are varied and include contractors, building managers, hotels, airlines, roofing companies, a hospital and small industrial suppliers and manufacturers.  In total we sell to about 150 different companies in various capacities and generally speaking… nearly all of our accounts, broadly across most sectors are purchasing less.

In an attempt to get a broad and fair perspective I attempt to speak to manufacturer and vendors reps that work for national companies and have information on national sales trends.  Without boring you…what I am hearing is certainly not indicative of any sort of recovery.  Generally speaking the majority are still experiencing "weak" conditions.

Wishing you a Happy New Year!

Best Regards,
CIGA Marc

Oil jumps above $79 a barrel
CIGA Eric

OSX to XAL ratio has once again entered the lower band of the 1999 trading channel. Unless the trading pattern is decisively broken to the downside, an indication a fundamental change, either supply/demand, currency-related, or combination of the two, the lower band of the trading channel has consistently marked inflection points in the oil market since 1999. This intermarket relationship warrants some attention going forward.

OSX to XAL Ratio:

Anticipation is much harder than reaction as it requires patience and discipline.

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Jim,

Did you see this garbage?

CIGA Eric

Dear Eric,

That takes higher interest rates, trust in paper and trust in the banksters, much of which is flowing out of the consciousness of the sheeple. You do not here this type of constant rhetoric in China and that is one reason they are doing better.

It is almost as if the Fed was apologizing for what they have done as they continue to do it. The US cannot finance its needs unless QE continues to infinity. For that very reason it will.

There is no practical method to drain liquidity in the size and places it has been deposited.

Will CDs take back the liquidity that has been placed in the international banks that were bailed out by the Fed via swaps? You cannot reverse such things.

You cannot get the trillions out of the hands of the banksters derived from OTC derivative winnings that were Federally financed for the winners. These people by some market miracle always seem to be the same people who move back into the banks which the banksters run as they know the weakness of such structures.

This is nothing more than ill conceived noise.

This article has no relevance to the real world outside of the dreams of the political equity people. It is cartoon thinking, within a cartoon book of a horrific story.

Most of all, is Main Street overheated economically?

Do not equate the citizenry of the USA with the few super wealthy public demonic denizens of Wall Street.

Please think about the above concept so you understand what nonsense this MOPE article swills out to a public.

Regards,
Jim

Fed exit strategy: let banks set up CDs
Fed proposes letting banks set up equivalent of CDs as tool to drain money from economy
By Jeannine Aversa, AP Economics Writer , On Monday December 28, 2009, 2:59 pm EST

WASHINGTON (AP) — The Federal Reserve on Monday proposed allowing banks to set up the equivalent of certificates of deposit at the central bank, a move to help the Fed mop up money pumped into the economy to prevent inflation from taking off later.

Under the proposal, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy.

The proposal comes as no surprise. Federal Reserve Chairman Ben Bernanke and other Fed officials have repeatedly said the creation of so-called "term deposits" — essentially the equivalent of CDs for banks — would be one of several tools the Fed could use to drain money from the economy when the time is right.

Against that backdrop, the Fed said the proposal "has no implications for monetary policy decisions in the near term."

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Jim,

COT data is released later today. It should prove to be quite interesting on a quiet day.

CIGA Eric

Central Banks Avoiding Dollar to Kill 2010 Rally, Barclays Says

Dec. 24 (Bloomberg) — The U.S. dollar’s gains may end in the middle of 2010 as central banks shy away from adding greenbacks to their reserves and the Federal Reserve raises rates at a slower pace than investors expect, Barclays Plc said.

May end in the middle of 2010 as central banks shy away from adding greenbacks to their reserves? Central banks are shying away right now.

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