Al's Insights – Tue 8 Oct, 2013

Morning thoughts from Big Al, Cory and Gary

Click download link to listen on this device: Download Show


Featuring:
Al KorelinCory FleckGary Savage

Comments:
  1. On October 8, 2013 at 8:00 am,
    Gary says:

    Here is the article that explains what I think is progressing.

    http://www.smartmoneytracker.blogspot.com/2013/10/is-next-bear-market-about-to-begin.html

  2. On October 8, 2013 at 8:03 am,
    Tony says:

    Al

    Did you get a chance to talk with Bill at RPM and get an update.
    Haven’t seen much any news on what their plans are since the CDE settlement

    • On October 8, 2013 at 6:36 pm,
      Big Al says:

      Will definitely give them a call.

  3. On October 8, 2013 at 10:01 am,
    Dick Tracy says:

    What’s Next, Gary has an interesting theory but these days logic is a game from the past. If The US dollar and stocks start treading much lower and the debt ceiling isn’t resolved by Monday October 21st, the record level of call money out on margin could see forced selling.

    Some might look around and not see panic, I know I see an extremely erratic market that indicates trouble is brewing and when the market starts breaking you won’t get a chance to see it because at that point it will be over.

    Just like what happened in Syria the public is starting to see reality and the reality of markets these days are the footings and foundation is undermined. DT

    • On October 8, 2013 at 6:44 pm,
      Big Al says:

      I kind of agree with you comments regarding erratic markets. Panic could very well be next!

  4. On October 8, 2013 at 2:39 pm,
    chupapollas says:

    sombreros negros hijoputas, bernanke mamador

    • On October 8, 2013 at 2:41 pm,
      proud canuck says:

      ?

      • On October 8, 2013 at 3:37 pm,
        Silverbug Dave says:

        The square of the hippoptamus is equal to the sum of the squares of the other two sides.

  5. On October 8, 2013 at 2:41 pm,
    proud canuck says:

    if markets go lower following the 21st, lets say the debt ceiling is not met…does that push gold higher? Gary?

    • On October 8, 2013 at 6:59 pm,
      Big Al says:

      My opinion Proud? Yup!

  6. On October 8, 2013 at 3:29 pm,
    Gary says:

    I continue to think gold will be locked in a range for the next two weeks. Usually during an intermediate stock market decline the selling pressure is heavy enough to bleed into just about everything. Watch the miners. If gold was going to make any serious rally the miners would already be sniffing it out.

  7. On October 8, 2013 at 3:34 pm,
    Silverbug Dave says:

    I like Gary for sticking to his guns and I can see his point of view.

    I had expected that gold would have a bigger bounce into the $1530 resistance on the post July rally as the US dollar dropped and gold could then fizzle and start another leg down on any subsequent dollar rally, perhaps even if the dollar dropped near to the 2008 low of 71.3.

    However, I really like the point and figure chart that is holding gold under $1340 at a strong downsloping resistance line that is as clear as day. If gold breaks above that, it’s a breakout on this chart pattern that goes back to last September’s top, i.e. it covers the whole crash. That’s the bulls’ hope, that rising to $1350 could constitute a major breakout on this chart:
    http://stockcharts.com/freecharts/gallery.html?s=%24GOLD

    Conversely, I can’t get excited because gold is still held in its downtrend and the post 28 June relief rally fizzled a couple of months ago at $1434, which was the very SAME PLACE where the market rolled over in Nov/Dec 2010 before going on a mini-mania to $1920 in 2011. So the 2011 upmove was an ‘episode’ of intense over speculation on the part of leveraged bulls. Maybe that was our mini-mania?

    My question to Gary is: how does he think the mania phase will come if his scenario plays out?

    If the dollar tanks here and gold is capped at about $1400 and the dollar rallies hard and takes gold down hard after the debt ceiling resolution – let’s say gold goes to $1030, where then? Why should we see a mania phase in gold if it is not responding to the sub-80 USDX dollar index this year? Why should it ever have a mania phase? That behaviour in gold would constitute a confirmation of a far longer bear market in gold, surely?

    • On October 8, 2013 at 6:14 pm,
      Gary says:

      That one is easy. 5 years of QE. Once the stock market stagnates and bonds continue to sell off that liquidity will leak out and look for something else to land on.

      Make no mistake the only reason gold is where it’s at is because of the manipulation after the QE4 announcement. Once the manipulation ends, and I think it will end if they can get gold back down to $1030, then the fundamentals will cause the secular trend to resume, and the year of manipulation will just cause the rally to be even more violent than it would have been normally.

      All artificial markets eventually break. Depending on how far out of whack they have been stretched, the harder they will move back in the other direction when nature regains control.

      We saw this in spades in 2009. The market was artificially inflated out of the 2003 bottom. When it finally broke we got a much worse bear market because it had to compensate for 5 years of artificial gains.

      I expect the shenanigans in gold over the last year will add several hundred percent to the final bubble move when it comes above and beyond where it would have naturally gone.

      So if gold’s bubble was destined to go to $5000, the year of manipulation probably means it’s now going to $7000.