Market Trends – Fri 4 May, 2012

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Roger Wiegand

  1. On May 4, 2012 at 9:40 am,
    Richard says:

    Interesting markets. We’re entering into a cyclical bear market for the conventional markets. According to my momentum indicators for gold, expect gold to trend down yet. Gold should hold up quite well with the general downturns in the global stock markets. The GDXJ has a very good chance of bottoming out in the next 3-4 weeks. I’ve been short oil as mentioned previously and took profits today due to the big down-draft. Expect oil to recover somewhat next week. However, the trend is now down. It just verifies the movement down of commodities in the recent past. We’re entering a significant global slowdown. The encouraging thing is the PMs won’t share in a proportionate way the down-draft in the conventional markets.

    • On May 4, 2012 at 10:24 am,
      Big Al says:

      Morning Doc,

      Can you do an interview one day next week?

      Big Al

      • On May 4, 2012 at 10:49 am,
        Richard says:

        I can and I sent you an e-mail. The only day I couldn’t do it at 12:30 PM my time would be Tuesday. I have a meeting with a potential business vendor.I did give you a time for that day. There’s some very interesting things unfolding which I would love to discuss.

        • On May 4, 2012 at 11:16 am,
          Big Al says:

          Hi Richard,

          Can you do any time on Tuesday?


          • On May 4, 2012 at 12:03 pm,
            Richard says:

            Al, 2 PM (my time—11 AM your time)on Tuesday would be good—-just check my e-mail to you for my phone number again. Let me know. Any other day is good—just set the time.

  2. On May 4, 2012 at 9:59 am,
    tj says:

    Another May walk away year.

    • On May 4, 2012 at 10:24 am,
      Big Al says:

      Morning tj,

      I am not sure of that yet!

      Big Al

    • On May 4, 2012 at 11:05 am,
      Richard says:

      TJ, you’re probably right on for the conventional markets but I feel the PMs this time will hold up comparatively pretty well.

      • On May 4, 2012 at 11:17 am,
        Big Al says:

        HI Richard,

        Exactly the way I feel as I said on the Daily Editorial with Rick A.

        Big Al

  3. On May 4, 2012 at 10:18 am,
    castanheiro says:

    Thank you Trader Rog, Big Al, and Richard,
    Appreciate all this good info and analysis.
    Best to you all!

    • On May 4, 2012 at 10:25 am,
      Big Al says:

      Hey Mr. C,

      Without your and other’s input this family would not be nearly as strong as it is.

      Big Al

  4. On May 4, 2012 at 10:38 am,
    Steve says:

    he Burden Of Freedom.Kris Kristopherson

  5. On May 4, 2012 at 10:40 am,
    Dennis M. O'Neil says:

    Great report as always Roger…it appears they were attacking the weak hands overseas last night.


    Coruption, abuse of expanded benefits, poor management and a missing at sea Merrill Lynch Executive have this not so bloated pension fund seeking Chapter 11 non-remedies. After all is said and done it appears Wall Street madness did more damage to the North Mariana Islands than did WWII. I provide a link to the reporter Michael Corkery’s video interview….. although not metioned in the video (but in his 5/3 article page C-1) the Merrill Lynch advisor went missing…. puportedly he fell off a fishing boat off Hawaii last September. A good rule of thumb may be if your fund manager goes missing while fishing……SELL!
    Coming attractions for US municipalities, States and Uncle Sam.

    • On May 4, 2012 at 11:48 am,
      Jerry O^OTB says:


      • On May 4, 2012 at 12:33 pm,
        Dennis M. O'Neil says:

        I agree….his body was never found…..I picture him snorkeling or under palm thatched bar in Belize.
        What is also interesting about the story is that when filing for Chapter 11 the fund was less under funded on a percentage basis than are many mainland US Pension Funds.
        The bureaucrats, teachers, fireman and cops are going to go Bolshevik.

        • On May 4, 2012 at 1:11 pm,
          Jerry O^OTB says:

          We have to many teacher, (who do not teach), to many fire departments, and way to many police……..and way the hell to many jerk bureaucrats, and all the pension money
          is going bye, bye,,,,all over the world,,,,,,this is just the tip of the iceberg…
          just my three cents worth…..00tb…..

          • On May 4, 2012 at 2:27 pm,
            Dennis M. O'Neil says:

            Where I am from OTB meant Off Track Betting.
            Who do you like in the Derby?

          • On May 5, 2012 at 2:16 pm,
            Jerry O^OTB says:

            Dennis…..OOTB….is a name big Al assigned me several years back,,,,
            Meaning ” Out Of The Box”….., this is before I convenienced him he
            should consider Ron Paul,,,inlieu of Herman Cain……

  6. On May 4, 2012 at 10:54 am,
    Mark Alan says:

    What do Jon Nadler and a dyslexic have in common?

    They both can look at a ten year GOLD chart and see a bear.

    • On May 4, 2012 at 11:18 am,
      Big Al says:

      I really never understood that, Mark A

      Big Al

    • On May 4, 2012 at 11:59 am,
      Richard says:

      Mark, I tend not to listen to Nadler since his prejudice toward markets come out strongly. I don’t mind listening to different opinions then mine since it challenges my own thinking and positions. But Nadler is so “off the wall” and gotten it so wrong and often his reasoning seems to not support his suppositions.

      • On May 4, 2012 at 12:41 pm,
        Mark Alan says:

        I haven’t listened to a single thing Jon Nadler says, except for entertainment purposes. I mean, COME ON! Where does this guy get his fundamentals and reasoning? Yes, he does at times provide some “interesting” commentary but his analysis of why gold should be going down is just idiotic. One thing about Jon is that he is NOT a speculator and for that, I can appreciate his reservations. But to sit there year after year and say that gold is going to fall through the floor is complete nonsense. Maybe one day he will get it right.

      • On May 4, 2012 at 3:45 pm,
        Marc says:

        Mark A., and Doc
        Re Nadler: Gee that is so, so true!

    • On May 4, 2012 at 12:04 pm,
      D. Brophy says:

      I have dyslexia and I see a bull behind every tree or bush. Though I`ve taken hikes before in gold country and found many bears grazing, then departed with haste to not be their next meal.

      • On May 4, 2012 at 1:14 pm,
        Mark Alan says:

        Throw them a salmon! That will give you some extra time.

  7. On May 4, 2012 at 11:39 am,
    John W. Robertson says:

    I think Richard (as usual) makes good comments on momentum to the downside, and certainly oil looked over-priced the last couple of weeks. I agree that equity markets are prone to drop, and along with them, commodities. We’ve all heard the refrain ‘sell in May’. Be a little careful with that, though, for at least two reasons:

    i. Just BECAUSE we’ve all heard it. Last year, gold rallied in July, not August or September. Wise man once said, “when old refrains are being repeated by everybody, they often go in opposite direction”.

    ii. Fundamentally, gold or gold mining shares look excellent for the long term as they have for some time, and as every year passes, more and more people are seeing it that way. The mass-market psychology from May 2011 or 2010 is not the same as it is in May 2012. The gold band wagon is still pretty empty, but some of the seats are occupied now. Also remember than when a trend reverses, it often does so with a large, one-day spike which can pierce strong of technical resistance levels. Technicals are important, but they’re not everything.

    Unless you are (frankly) market timing, buying for the fundamentals is still a pretty attractive way to invest. There’s so many cheap mining companies right now, honestly, it’s hard to know where to begin. Buy for 20% less next month? Sure, but when we’re looking at potential 5 and 10 baggers, be cautious with how much emphasis you place with trying to buy at the absolute bottom. Because as we all know, most people can’t successfully do it.

    • On May 4, 2012 at 11:55 am,
      Richard says:

      John, you’re first paragraph shows a lot of wisdom. I tend to be a huge contrarian and after I do my due diligence, one of the things I look at is what has happened seasonally in the past. The “sell in May” saying this year scares the heck out of me since it has occured in the last 2 years. The same is true for oil. I’ve been short both this year in spite of the “law of averages”. Often in my deliberations, I look at all the odds as it relates to my positions. The “sell in May” this year go against one of my dictums. It reminds me of playing “Texas Hold-em”. It often boils down to the odds.

      • On May 4, 2012 at 12:39 pm,
        John W. Robertson says:

        Richard, thanks, and thank you. You’re technical insights — and I mean this — are excellent since you’ve been coming to Al’s site. You seem to find the momentum plays and meticulously stick to them. I said most people aren’t good enough at timing, but you (and one or two others I know) are some of the few exceptions. You’re a doctor (?) I believe? Doctors and pilots make some of the best traders. The rest of us, with our gut-instincts, emotions and half-baked tech analysis, should be so lucky! My creedo…Fundemental Investing: a way for the rest of us dummies to make money!

        • On May 4, 2012 at 1:12 pm,
          Richard says:

          John, yes, I’m a “semi-retired” physician. I’ve been in the markets since I was a “kid” but didn’t get to really get back into it until 1999. I find the markets fascinating. I’m not a short-term trader but I attempt to from a macro standpoint look out into the future and develop what I think will be future themes and then move with them and the trends. I will do some timing when it’s obvious—-I’ve learned over time to stay as objective as I can and put my emotions aside. We’re going to get some fantastic buys in the miners in the next few weeks. I’ll attempt to continue to give this site my unbiased view-points based on a large number of factors/charts I follow. I will be slowly phasing into the miners over the next few weeks especially after the conventional markets (IMO) are close to lows again.

  8. On May 4, 2012 at 11:46 am,
    Jerry O^OTB says:


  9. On May 4, 2012 at 12:55 pm,
    Mark Alan says:

    Well, I said yesterday that the market activity looked like a head fake, although we didn’t close up $1655, nevertheless, I honestly feel that gold put a bottom in the first week of April. It has just been consolidating since. Gold broke out of a descending wedge last week and it is common for price to move back down and touch the downward sloping top line. That’s what we got yesterday and today. Gold closed up above the sloping wedge. Volume is good. Fundamentals and the latest news reports are absolutely stunning for gold, so I just don’t think we are going to go below $1600.

    Sell in May and go away is NOT the thing to do this year…unless you’re in financial stocks (LOL!!!) There are a lot of juniors that have put in bottoms and they are acting just like gold right now. In fact, that is how I determine entry points in the miners is by overlaying their stock price to that of gold. Some miners move with gold very well, while others have a mind of their own. Same for silver and silver stocks.

    I don’t think we have seen the top in the general markets just yet, irregardless of the fact that we do have a global slow down. Investors are going to start chasing yield again and the will probably dog pile into stocks like lambs to slaughter. We will probably see a little more downside action in the markets on Monday and Tuesday if the French and Greek elections go the way of destruction. but there are still some indices and indicators that are saying “bullish” on the general markets. I would not be surprised to see the S&P move up to 1455 and beyond before July comes around. Then we will have all kinds of fun as the market begins its slow grinding death.

    I don’t think oil is going to stay down very long. To me it has solid support between $100 and $95. Besides, the Saudis have to keep the price up inorder to make a profit. If it falls back to $90 you can bet they will be complaining. With war lingering around every corner and geopolitical issues the way they are, I just don’t see oil heading much lower.

    • On May 4, 2012 at 1:13 pm,
      Jerry O^OTB says:


      • On May 4, 2012 at 1:25 pm,
        Mark Alan says:


        Commercials decreased more shorts and added to longs on both gold and silver. But Silver is the big one. Big increase in their long positions.

      • On May 4, 2012 at 4:12 pm,
        Mark Alan says:

        Sorry Jerry

        Appears that I have looked at the wrong date for the COT reports 🙁
        The Cartel increased their net short position substantially in BOTH gold and silver.

        stinks but one can’t always go by what the COT reads. I’ve seen it at times look bearish only to watch the metals rise and vice versa.

        stay frosty and have a great weekend.

        • On May 5, 2012 at 2:19 pm,
          Jerry O^OTB says:

          Thanks Mark A… also have a great weekend

    • On May 4, 2012 at 1:18 pm,
      Richard says:

      Mark, how did you like that move down in oil today? I took profits right at the lows. Oil then recovered toward the end of the day. On some of the charts, oil held at the 200 day and 50 week MAs. We should see a rebound next week and then I’ll have to make a decision whether to go short again—in all probability I will. The Saudis would prefer to have prices in the 80s since they don’t want to have us or others particularly move any faster into natural gas and other alternative energy sources.

      • On May 4, 2012 at 1:24 pm,
        Mark Alan says:

        Congrates on the oil short. Strong move and the bounce was usual, right off the 200 day. I don’t know about the $80 barrel oil though. Even if oil were to drop that low, I think that natural gas will still move ahead because of the fast amounts and the cheapness it already has. But oil is needed in times of war and right now Egypt is back on the front burner and it is getting hot. We may see a little more downside action but I think consolidation in the $100-$95 will happen first and then another move. Jim Rickards points out too that the Saudis don’t like $80 oil, they like the $100.

        • On May 4, 2012 at 1:41 pm,
          Richard says:

          If I’m correct that we’re entering into a cyclical bear market (which IMHO we have) for the conventional markets, oil will not be impervious except for a possible exogenous event. There’s a number of reasons I believe we’re in the early stages of a cyclical bear and I cannot enumerate enough of them. We’re almost at the end of earnings season and there then comes a void in time of events to influence the conventional markets until the Supreme court decision on Obamacare and the Fed decision on potential continuance of “twist”. Also, the closer we get to the election the less likely there will be a positive influence on the conventional markets. Those are just political issues affecting a down pressure bias to the markets. Then there are the technicals and fundamentals which I believe also support a down pressure bias. The technical charts are not looking good right now. Apple’s chart looks horrible currently and has taken out the 50 day MA. If Apple goes, look out below. Did you know that earnings in the first quarter are YOY (year over year) going to come in at 5 % positive. Of that do you realize that Apple made up 2% of that increase. You can then see the difficulty.

          • On May 4, 2012 at 3:16 pm,
            Mark Alan says:

            yes, I read that about AAPL. What a joke! There is no doubt we are in a cyclical bear market, which could really accelerate if the elections turn sour against the status quo. These are going to be interesting times and incredible to witness.

            Look forward to your comments next week on Big Al’s show!

    • On May 4, 2012 at 9:53 pm,
      John W. Robertson says:

      Just about two years ago, when oil dropped all the way from $149 to $35, the Saudi’s and OPEC said “$75 bbl oil is a fair price”. Wonder if we could still hold them to that now?

  10. On May 4, 2012 at 2:46 pm,
    Dennis M. O'Neil says:

    Richard when yo typed:
    “the closer we get to the election the less likely there will be a positive influence on the conventional markets”
    Are you saying Fed easing in whatever form will not happen or that when it does it will not have the desired effect by November 6.
    I think we will have significant Fed easing in some form by July 4th. In fact a lateJune early July announcement would be smack dab in summer low volume trading. Maximum impact QE3 announced late June early July and everyone one on South Hampton Beach will be glued to their cell phones. The ‘bounce’ would not last until Nov., but the wording could leave traders in fear of missing a huge move and bidding to avoid playing catch up.
    In the end who knows? That is what makes a horse race. But those at and near the Fed will know. Just that is enough to show the Fed need not exist.

    • On May 4, 2012 at 3:22 pm,
      Richard says:

      Dennis, I believe the Fed will be more reticent to do anything gross from a monetary basis the closer we get to the election. After all, they want to “appear” independent of the November elections. However, they may in June say they’ll continue the “twist” program or just go ahead and continue it without saying much. If by late June/early July, they do make some other kind of announcement of a different type of monetary easing, I believe we’ll be in the throes of a bad market for the conventional markets and it won’t make much difference since it takes months for that money to have an impact on markets. Also, I believe that the more the Fed pumps money into the system, the less affect it will have in the future on markets except for commodities and the PMs. Den, what do you think?

  11. On May 4, 2012 at 4:39 pm,
    Dennis M. O'Neil says:

    You typed “After all, they want to “appear” independent of the November elections.”
    I think those days are gone. The pretense of the Fed’s being independent makes me think of the days when the now trumpeted Bildeberg Group did not exist.
    Those were the days of believing the Fed was some type of removed monetary referee without any kind of conflict. Not even a distant cousin playing for the away team.
    I think the Fed will do exactly what the owners of the Fed tell it to do and not one minute later. Which makes me wonder who the Queen of England….the Bank of England, the EU and/or the ECB….who do they want to be the next US President? Did we really win the War of 1812? What did they all plot about at Davos? Who actually owns the Fed anyway?
    You asked: Den, what do you think?
    Dennis thinks he lives in a Twilight Zone episode.

    I wish it was 6:42 PM on Maple Street again….:

    From March 4, 1960…..

  12. On May 5, 2012 at 3:57 pm,
    Steve says:

    nice episode Dennis Age old tactic “divide and conquer.”Race Party Status Religian.Subliminal sabatoge anyone?With emotional reinforcment for accent and effect.War of the worlds?Heres one
    Stickin with 40 days to accension.Ben will pump from other side of mouth soon.

  13. On May 6, 2012 at 7:50 pm,
    traderrog says:

    Stronger dollar on falling euro and Europe could take the dollar to 82.50 resistance. Gold is holding at 1640 but might tread water for a few more days. Gold has a bull parbolic pattern spread over several weeks. Its signaling a breakout out but this could still atke 1-3 months to get moving. Meanwhile the shares continue to suffer but a few of my reco’s based and started to rise last week signaling a near ending to the gold and gold related selling – Traderrog