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The markets are all connected and it is thug-ly – Bob Moriarty

February 3, 2014

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Discussion
77 Comments
    Feb 03, 2014 03:57 AM

    Tell it like it really is, Bob.

    Why buy gold when shorting the market via buying puts is a more efficient use of money. Besides it is less risky.

    SEB
    Feb 03, 2014 03:02 AM

    Bob for president! 😉 Bob don’t you dare going anywhere. We need you here!
    In Sprott we trust! haha

    Feb 03, 2014 03:06 AM

    I always have time for Bob!

    Feb 03, 2014 03:12 AM

    Why is XAU going down?

      Feb 03, 2014 03:24 AM

      The XAU is only 75% gold miners while the HUI is 100% gold miners. HUI components also do not hedge beyond 1.5 years. In addition, the XAU contains more large-caps.
      The HUI has been outperforming the XAU for the past month, and for good reasons.

        Feb 03, 2014 03:39 AM

        the HUI, does not hedge past 18 months ? Is that info. current.

        At one time HUI co’s never hedged at all.

        Last 5 years I heard they were all getting reckless.

        Thats why they stop moving when gold keeps moving up.

          Feb 03, 2014 03:49 AM

          It’s still considered unhedged. As far as I know, nothing has changed.

            Feb 03, 2014 03:13 PM

            I take that back…last 10 years a lot of them have flipped and have been hedging.

            BANKER SALES JOB.

            These miners do have some issues and problems.

            HUI was performing very poorly as gold got over 1550 on that big run.

            Anyway……………………..

            Feb 03, 2014 03:42 PM

            My take is that $1550+ gold brought in big retail (bagholder) money for big early money to distribute to. The smart money had 1000-1500% gains that needed to be booked.
            In my opinion, that process of distribution is over and the current setup is similar to 2000-2001.

            Feb 03, 2014 03:06 PM

            Investors knew these miners were not hedging…HUI could have done much better.

            It lagged terribly. One reason these miners can’t get out of their own way.

            Feb 03, 2014 03:12 PM

            Possibly, but big gains are good fuel for subsequent poor performance.

            Feb 03, 2014 03:45 PM

            HUI should have been screaming with gold where it was.

            Investors have always complained about hedging.

            Does not help shareholders and if you are a gold bull….

            I beg to differ….lots to do with hedging.

            Feb 03, 2014 03:48 PM

            I disagree…

        Feb 03, 2014 03:52 AM

        TSX GOLD INDEX also down.

        There’s something fishy.

    Feb 03, 2014 03:12 AM

    Can you imagine the emberassment if Yellen changes Bernanke’s prescription, I don’t think it can be done without the markets going banana’s.

    Look for steady as she goes on the Niagara river and over the falls. DT

      Feb 03, 2014 03:45 PM

      I agree DT. If Yellen changes course immediately the market would be shaken. I am waiting for some new program that keeps the easy money flowing into the markets.

        Feb 04, 2014 04:12 PM

        There will have to be a “cover story” to justify reversing the taper. So look for some exogenous news event cleverly disguised as a Black Swan to set the stage for the reversal.

    Feb 03, 2014 03:22 AM

    BEWARE OF INSURANCE POLICY ON HOUSE OR PROPERTY

    Exclusions are does not cover …..RIOTS AND ACT OF WAR.

    If it really gets bad…..real estate is a ….GONER…

    Get rid of your house and buy farm land.

    LAND….they don’t make anymore and its hard to destroy.

      Feb 03, 2014 03:33 AM

      Insurance companies use the word….CIVIL UNREST….as well

      No, there is no coverage.

        Feb 03, 2014 03:23 PM

        HEAVYHITTER, I’AM AN INSURANCE AGENT 35 YEARS….. YOU ARE RIGHT ON THE MONEY ON THAT ONE.

          Feb 03, 2014 03:27 PM

          We will see another housing crash much bigger than before.

          Aging population and maybe some serious civil unrest.

          See what happens. I’m a land lover.

            Feb 03, 2014 03:39 PM

            These hedge funds who bought all these properties and renting them out
            ….also reports are all these properties look horrible not being taken take
            of at all.

            GUESS WHAT…..liquidity gets bad and looks to me it will.

            HEDGE FUNDS WILL BE SPITTING THESE PROPERTIES UP…..

            IN FRINGIN ……DROVES…..not alone on this..ask Robert Shiller…all time housing expert.

            HH…..I guest the hedgies never had any tenants,,without income and a job……..

            guest….guess……..

            Feb 03, 2014 03:40 PM

            Good point Jerry. Business cycle heading down. Jobs lost.

            The Fed has made the housing recovery a temporary illusion.

            HH….I agree on the housing mess……….

            the next move for the hedgies on housing …..will be…..RENT TO OWN……….

            Feb 03, 2014 03:47 PM

            Jerry, I’m not certain, but doing the math…odds are getting there

            HOUSING IS IN FOR A VERY BIG BUST.

            Feb 03, 2014 03:50 PM

            Another good point ..Jerry

            HA… rent to own….but when investors can’t pay their bills
            won’t last long.

            YIKES……SELL…SELL

            HH……..REAL ESTATE has been in a pickle since 1982….and the start of the MCMANIONS….the baby boomers forgot to think who they were going to sell
            their overpriced house to……….Now, we have the start of ASSISTED LIVING FACILITIES.

            Feb 03, 2014 03:57 PM

            Regardless all these properties starting to look like a rats nest
            hedge funds own.

            Who is going to want to buy all those stink pens.

            Bids are going to be lowered across the board.

            Feb 03, 2014 03:59 PM

            Couldn’t agree more Jerry. Demand is just not gping to be there.
            Baby boomers are a dying breed.

            I agree,,,,who is going to want to have an unemployed renter, that gets a check from a bankrupt govt……………and rent controls………

            Feb 03, 2014 03:08 PM

            Hate to disagree guys but housing will rise along with rates. That is the usual correlation. Keep in mid also that US housing is still coming off a historical low point. It has momentum even if the short term picture looks bad. I would not worry about it.

            BIRD……….it is all about the glut in housing,
            , and the down sizing, and the boomer, lose of jobs and income.

            Here is a new stats …. Youth 20-30 yrs. old.., are going and living with their grand parents, these would normally be first time buyers.,,,,,

            Bird…..rising interest rates , require more income, or reduction in the unit cost…..(with no consideration given to down payment ) The historical low point is because there are not as many x or y gens as baby boomers…..and there is a glut of housing,
            pLUS..the interest rates are not realistic, the govt. has supported the low and no down loans, which have been proven to be trouble since 1970 or before.

            Feb 03, 2014 03:41 PM

            Yes but most of the money, savings and assets are in the hands of the same demographic you refer too. Ever seen the data on age groups? Like you say, the kids are poor but I think the grey generations have more staying power than we give them credit for. They don’t all need to sell their homes in any case. There is no predictable path to a big asset sell-off in other words and if prices fall so will supply as the older group just hunkers down and waits it out.

            Bird…..the grand parents of these 20 -30 yr old ,,,are the boomers………..the greys are the ww2 generation and are in the nursing homes and retirement villiages

            Feb 03, 2014 03:36 PM

            HA….no way..Birdman

            The housing market is full of speculators. Thats what caused the bust in 08.

            Now Wall Street is in housing even in a bigger way.

            There is no need for housing not like homeowners wanting a roof.

            Incomes are way down…baby boomers down sizing.

            HOUSING IS WAY OVER VALUED

            HOUSING BIG BUST IS NEXT. Stock bear…Wall Street is now in trouble.

            Armstrong has a chart down for the next 15 years after 2015

          Bird….the staying power ,,,has been depleted in the last 6 years…..for the boomers who were savers……….have lost a fortune……”zero on CD is a big wack out of ones earnings and potential future earnings.”..
          Only….25% of the boomers have saved $56,000 as an average…..25% do not have a dime

            Feb 03, 2014 03:56 PM

            All the more reason for them to hold on to their houses for a revenue stream. Rents have been rising. I doubt the eventual selloff will be as severe as some are projecting. In any case, it would happen across a span of 20 years or more. A lot can happen between now and then.

            You can not afford to maintain , repairs, taxes, on a Mcmanion,,,and rent to someone, that can not afford to own one……………..the renters are not going to pay the amount that is required if the owner has a mortgage on the property…..the numbers do not work…………

            Bird….thanks for the debate….appreciate your time…..really……..and you to HH…

    Feb 03, 2014 03:44 PM

    The LAST bloody thing you want is for anyone to notice this rally. We are struggling with the 200dma.

      Feb 03, 2014 03:09 PM

      The leaders aren’t struggling at all. Have a look at PPP or even TGM.V or tiny TYP.V
      GDXJ is being held back by the lower quality components.
      I welcome the bears that want to short this rally. There are buyers waiting for them.

        Feb 03, 2014 03:40 PM

        SMF.TO IS the leader

          Feb 03, 2014 03:36 PM

          What’s your point, Phil? Plenty of leaders are above the 200 dma. Like the ones I mentioned.

        Feb 03, 2014 03:37 PM

        Gold is a short as I see it but that is just me Matty….a big old cynical gold bear.

        Feb 03, 2014 03:59 PM

        TGM.V now has 400 Million shares outstanding. I don’t know about you but even if it is a nice little company and may produce in 2-3 years that is alot of shares with even more dilution in the future.

        I see shareholders being kicked in the ****’s with a reverse split sometime in the future on this one.

        The little guy/gal always takes it on the chin.

          Feb 03, 2014 03:45 PM

          Vortex, I think you should sell TGM.V immediately if you own it. Development stage companies have to raise money. That’s just the way the real world works. Grown-ups haven’t sold a share since they are invested with an eye on the big picture and the big win. I will happily buy at 38 cents even though I own it at much lower levels.

    Feb 03, 2014 03:12 PM

    FWIW, here is my approach on the broad stock market…
    wherever the market happens to find support, pay close attention to the bounce. If we fail to make a new high and then accelerate through whatever near term low is made, you will have the primary trend change which would (for me) favor the end of the bull market.

    Note that while the definition of a bear market is a 20% decline, during modern history the average cyclical bear market decline (within a secular bull) has been close to 30%. And the average decline during a cyclical bear (within a secular bear, has been close to 40%)

    If an index moves down 30% there are plenty of individual stocks that are down in excess of 50%.

    A possible strategy for someone who is overweight stocks (or simply nervous about the chance of a primary change in trend, would be to raise some cash during any upcoming bounce.

    If stocks were then to make a lower low, that person would somewhat less likely to sell aggressively into a panic, given that they had raised cash.

    With regard to mining stocks — if the market were to experience a crash, I would assume that the sector would be brought down with the general market (though I would look for a possible divergence — that is relative out-performance).

    On an intermediate/longer term timeframe, I still expect the metals prices to move higher and a large rally in the miners.

    I am not a registered investment advisor, but simply expressing my own opinion.

    Feb 03, 2014 03:18 PM

    an after-thought…
    while it is extremely difficult to predict a crash, markets do not typically crash off an all-time high. More typically, they go into a solid correction and then have a failing bounce.

    It is that failed bounce and the acceleration through the initial low which is the environment for a crash. This is what happened in ’87.

    Once you live through that as a trader, you always have it in the back of your mind. Should this market have a 10% down move, and then a failed bounce, there will certainly be comparisons drawn. Whether it ultimately proves out, who knows.

      Feb 03, 2014 03:37 PM

      Good point Eric. Meanwhile, the raft of recent bad market news, rising Vix, EM troubles, China worries etcetera is just an inducement to get enough people short the market to power it higher again. Does not worry me in the slightest that we have seen a 1000 points peeled off the Dow. Not yet anyway……I suppose it could get scarier and as you suggest we could get a failed bounce….nawww!

      Feb 03, 2014 03:00 PM

      Very interesting post Eric. I agree when you say a major fall in the conventional market will bring down the PM stocks. I do not think they will get hit as hard but if this does happen it would be a great buying opportunity.

      We will continue to watch if the trend for the conventional markets change.

    Feb 03, 2014 03:55 PM

    Bird…
    I grant, it is an open issue right now. You could be right. That’s why investors will learn more from the bounce than the initial decline.

    Sort of the flip side to what we recently saw in the mining sector. When we had the initial ramp, it was at first unclear whether they would simply range trade and head down to re-test lows; or consolidate and ramp still higher.

    We got the ramp and now perhaps another round of consolidation before more of the miners make a run for higher moving averages above.

    My bias is that the broad market is finally ready to change trend, but the jury will be out until that bounce.

      Feb 03, 2014 03:59 PM

      Could be right, Eric. I am a believer this is just a healthy overdue corrective period. The US equities trend is still intact pretty strongly and we should be seeing more money flow back in if the bounce I suspect transpires. The recent bad news is just meant to scare the shorts off some people!

    Feb 03, 2014 03:14 PM

    Until the Dow broke MA(200) today I would be in Birdman’s camp, but now I think Eric is making sense. Time will tell!

      Feb 03, 2014 03:57 PM

      That just makes it all the more convincing, CFS. How else are you going to stampede some folks into running for the exits just in time to drop a curtain on them? On the other hand, Eric is making a convincing case and as you know my wife still agrees with hime that I am an idiot sometimes. We shall see!

    Feb 03, 2014 03:15 PM

    Bob doesn’t know the big picture details. US stock market will be fine this year. 2015 on not so. He don’t see one of the biggest moves ever and now he’s going to call the top.
    Also he didn’t call this extreme mash up on gold. Common man I’ve got some guys that called both. Our windscreen is clear and we know where we are going. China is heading for the ditch but will take some time.

    Feb 03, 2014 03:37 PM

    Bob did call the silver top….the US market can be a safety for capital?

    Feb 04, 2014 04:05 AM

    And I should mention I know a few guys that lost a shit load from Bobs moose pasture stocks…

    Feb 04, 2014 04:04 AM

    nobody, and I mean nobody can time the market correctly. They may hit it once or twice but people always try to pick the time. If you have a longer horizon there are some great miners out there with good management, good cash, and some good projects, and good cash flow. They are the dogs of the market right now but they will see their day. Bob is right. Gold stocks will do very well over the next 5 years. However, most people that are reading this now will be long out of the market by then…..

      Feb 04, 2014 04:52 PM

      Whatever your horizon is, you are timing. You are timing by claiming the next 5 years will do very well, don’t fool yourself.