Monday and The Doctor Is In
Click download link to listen on this device: Download Show
Just an added thought…some of our commodity group now look to be turning up. Corn, wheat, heating oil and even nat-gas (a little more down the road) are looking ready to move. I think crude will bounce well off a hundred. These amongst others are one of the signs that suggest flows into equities may be ready to reverse over the short term. It should be clear to all that in order for a rotation to take place out of stocks, albeit temporarily, it is essential that there be someplace else to park money in the interim. This is plain obvious to me and it is why I believe we are very near to a market correction that I continue to believe will manifest prior to October. When? I wish the hell I knew. Just a sour crop report or supply disruption in Ukraine would set the balls in motion. My bet is on August and a flare up with pro-Russian rebels. Let us not forget that Ukraine is the second or third largest of the worlds grain exporters nor that so much natural gas and oil passes through that country n its way to Europe. With hostilities ramping up over there as we approach the colder months of fall it just seems obvious to me that a price burst in those commodities (energy and grains) is on its way especially as seasonal price trends magnify the change in direction. It is my belief we should be positioning on those resources now while they are still in the bottoming process as the changes could come very quickly. I think what is important though is that there is an identifiable reason equities see a decline that we can all understand as this then provides the basis for a foundation or a rationale of why they should rise again…..as crazy as that sounds. That is just how I see it unfolding. Maybe crude will be the trigger once it again touches down and perhaps makes a double bottom at 100 bucks. Stranger things have happened.
Doc – still see GDX hitting around 24.75. The miners don’t look like they want to go anywhere.
GDX is sure hanging in there. And Doc says look at those Bollinger Bands – they are really narrowing.
August 5th set up for a breakout date. JMHO
Dennis M,
Why do you pick August 5th?
IT is his birthday…………..
or the kids go back to school that day……
notice he said “break out”
I guess what I am asking is this: While you have not adjusted your downward target for gold, have you adjusted your buy prices for the miners you are watching based on the action we are seeing?
DC; I believe we’ll have a better opportunity to buy some of the miners in mid august. However, having said that, there are a couple I’ve been purchasing in small amounts since there doesn’t appear to be a lot of downside for them. I’m willing to hang with them if there is a minimal downside.
Doc just curious but you seem to buy a little here a little there, do you ever sell a little here and a little there lately?
Glen, about 3 weeks ago I mentioned I sold some of my holdings and keeping some others. Right now, I’m waiting for a little more sell off in the PMs and then I’ll purchase back those stocks I sold. I have some that I’m holding now for the long term since there doesn’t appear to be much more significant lower risk and they have liquidity to hold them over.
How did you play today?
1000 mg of Tylanol and I got an 87.
You guys are on your way to serious addiction!
Well did not play much today all.. Nothing but sidelines. It’s killing me. The charts are speaking to me and look like they want to head higher but my gut says one more fall. I just hope it aint from a higher high in gold/hui..
If your referring to the 87 crash? my brain in on overdrive.
I meant are you referring to 87 crash after taking tylenol lol. Trying to understand al’s humour.
I think this week is more important than the following two for the miners. Since the miners are leading indicators right now, that makes this week more important for the metals as well.
Right now, GDXJ is up 49% in dollars and a whopping 43% in gold/real money since the December lows. GDXJ represents the sector; many individual stocks have done far better.
I believe much greater gains are coming soon. The question is: Will GDXJ go higher from here or will it pull back a little first. Here it is priced in gold (GLD):
http://stockcharts.com/h-sc/ui?s=GDXJ:GLD&p=W&yr=3&mn=3&dy=0&id=p97581413011&a=361385756
Thanks Matthew!
Thanks Matthew…you need to get on the roundtable…ok? I will ask BIG AL…What say you….BIG AL??…:)
It would be a pleasure to behave Matthew join us!
Yes, it would be a pleasure if Matthew would behave! 🙂
A reasonable scenario. I’m looking at the monthly charts for GDXJ, GDX, $XAU, etc. and they’re all up against their 20 SMA. I would expect a reaction downward off of that…
http://stockcharts.com/c-sc/sc?s=GDXJ&p=M&yr=6&mn=0&dy=0&i=p18748218293&a=361411356&r=1406578459131
where is HH……..he likes the gdxj………….
HH GO ! SWEET ! https://www.youtube.com/watch?v=C2q2bis6eLE
HD HQ…….
You guys talking in “code” now?
Another opinion to consider. Jordan Roy Byrne interviewed Hedge Fund Manager Erik Townsend of Financial Sense News hour fame.
Erik Townsend is a very smart dude who is a long-term PM bull, but thinks in the short-term, the next 1-2 years gold may be headed down to the $1,200 area or maybe even a little bit lower. Erik does not feel the the capitulation phase has taken place for a real bottom in gold and silver.
Its a really good listen.
Funny you mention that Vortex. I was thinking almost the exact same thing. How can there be capitulation when so many are waiting with baited breathe for an imminent rise? Lately there is almost nobody expecting further downside except for a few who still think we will retest lows. Even Goldman raised their outlook. On the other hand, the thousands of folks who used to be engaged in posting daily on so many sites seem to have mostly gone silent. It is mostly the newsletter crowd talking up metals lately.
Honestly Bird,
I don’t know how in the heck anyone can make any sense out of these markets. Everything is completely discombobulated to the extreme. Absolutely no rhyme or reason to anything be it the general markets or the PM’s/Commodities complex.
There is not a day that goes by where I’m not trying to gauge the ebb and flow of all of this nonsense, and pulling the trigger is proving to be a hell of a lot harder than you might think. It is easier to buy the phyz and just sit tight, the paper, not so much.
Anyone telling you they know where the PM’s are headed anytime soon is full of it. Just smile, turn around and walk away. Its nothing more than a guess.
I would love to put some money to work in the PM complex be it some more phyz bullion and/or some additional paper products.
This crazy market is going to leave a whole lot of very very smart people standing up and asking themselves………what in the world just happened after a market event takes place and multiple zeros in their personal accounts are eviscerated after a real pronounced capitulation, if it even happens.
I listen to both sides of the debate relentlessly and with an open mind and I’ll be damned if I can figure out which way any of this is going.
A agree about the news letter writers. Most of these people wouldnt have a penny to their name if it wasn’t for the gulible subscribers (whom I’m one) to fund their life styles.
Every once in awhile we get another alarming glimpse of the future, Vortex. We may not know exactly where we are going or what the markets will do next but we can sure get a big picture perspective of what is coming down the road.
Case in point….I came across a chart today that I think I might have posted up once before. It is real median household income in the US. Take a look and tell me if you notice anything that jumps right out at you from that chart.
Real Median Household Income 1985 to 2012
http://research.stlouisfed.org/fred2/series/MEHOINUSA672N
It is a double top so obvious you could drive a bulldozer between the peaks. But what is it really telling us? I happen to think we are mean reverting on incomes as wages are being flattened across the globe.
And that spells big trouble for the consumer economy down the road. This chart is also saying that living standards are dropping in real terms. We already knew that of course but the look of this is that it is breaking down even further which puts in question how much of a recovery is really happening.
There has been a lot of chatter about rising wages lately too but the stats are not yet backing that up in aggregate numbers that are significant. Some people might argue that we cannot work with technical analysis from this kind of chart because it is not financial. I would disagree of course. A chart is a chart in my books and this one looks like trouble for American families.
So I guess what I am saying is that it will pay us to make the most of our time and resources to save and invest now because the future looks like it will just be progressively more difficult. We may just look back on these times sometime down the road and call them the good old days.
Bird,
There is no doubt we are headed for some difficult times ahead. We are in a phase powered by a deflationary subset of reversion to the mean forces that will be led by insolvency, currency devaluation, joblessness, and general social decay.
The chart although in simple form, illustrates these troublesome trends.
Intertwined with in that paradox is a wealth destructive beast that the average person can not quantify for the most part and it ravages his/her purchasing power through a whipsaw of a pronounced inflationary impulses coupled with deflationary overtones.
The deflationary and inflationary forces will accelerate as time goes by and no amount of MSM propaganda can provide cover for the real world events that the average man and woman on the street must endure and wake up to everyday.
What is unfolding is going to be almost unquantifiable to those folks who have not educated themselves on these topics, thus they will be vastly unprepared for these destructive forces. Even the knowledgeable folks here who talk about these things everyday are not really prepared because although we have harnessed the knowledge, we are devoid of control. In the end mother nature and her limited supply of resources will dictate change in a way that mankind cannot refute or object.
In truth there is only so much one can do. I agree with you, enjoy life and your loved ones to the fullest extent. Try to live life with integrity, be a good person with honor, try to help those in need and try to shield yourself and your family as best you can, and put aside some funds for a rainy day, and when that is done.
Go for walk and enjoy the sunset or the beach or a hundred other things that we take for granted everyday.
Great post Vortex! Well said. You are so right that what is happening is not quantifiable by most of the public. Even those of us who follow the twists and turns closely are often stumped by what the correct course of action needs to be. Maybe the biggest advantage we have is mental preparedness. A system unwind will not come as a surprise to anyone who reads these pages on a regular basis.
I was just listening in to a Martin Armstrong interview by the way. So here is the link if you are interested. I certainly support his take on the dollar. But USD is just one of a group of currencies I have confidence in. Another is the Canadian dollar and of course there is the Ozzie. (They all make these African currencies look like monopoly money).
Martin Armstrong – Financial News – 47 minutes
http://hwcdn.libsyn.com/p/e/7/2/e7242d8d35f4323d/Martin_Armstrong_25.Jul.14.mp3?c_id=7433180&expiration=1406639101&hwt=7f4824ce31c5464ce5a3f11f4701fc3c
Thanks Bird, you take care.
Will do Vortex. If you listened in to that Armstrong interview by the way, he did say some really fascinating about gold and silver. One was that an impetus behind its revival would come about as a result of the developed countries going to all digital currencies.
In an earlier post I left a few weeks back I had mused that metals would fall into irrelevancy with the introduction of electronic money (M-Pesa style). I eve suggested they would return to being barbarous relics. That however was totally incorrect in retrospect and so now i will eat my words.
I think Martin has got this right and made an excellent point. In fact gold and silver should see an abrupt rise in demand the closer we get to going off paper money for the simple reason that people will worry they will become trapped in a fully trackable and traceable form of money that leaves no room for freedom.
Barter itself is not good enough as an alternative. There must also be a currency format to support the barter system that will evolve in opposition to mobile and plastic money. As an outcome I must change my stance and will suggest that old coinage will become the choice of those who do not wish to participate in a system that allows nobody to live outside the cartoon lines.
I would recommend therefore that investors focus most particularly on collections of popular silver coinage (utility value of small denominations) that are understood and would be accepted by most buyers. Junk bags of US 90% silver are ideal. These coins should have an exceptional upside in price as we slowly approach the date when most forms of paper money and coinage are phased out.
Few will be ready. You really must begin collecting now and do it well before full conversion to electronic forms come into being. You know how we are all looking for the catalyst that will make silver and gold meaningful and especially valuable again. Electronic money may just be that catalyst.
Martins comments on gold come near the end of the interview.
Another thing he said in that interview…..you simply cannot have a bank run when you have a pure electronic money. Won’t happen. In some cases there is not even a bricks and mortar bank to run too. This could be both good and bad. It means that devaluations could happen automatically without the ability of the public to respond or that money could be confiscated by governments and courts. These days the worst that an offender faces is that his passport and drivers license is taken by a court judgement in order to limit freedoms. What happens in the future when they take your mobile money codes and phone as well and then hand you a fixed-limit court issued card instead. The disgrace of it all. Just a thought……
Thanks for the link Vortex.
Much appreciated.
Cheers.
Skeeta, you’re very welcome.
Of course we should never forget that if we do deflate due to a credit bubble burst we should expect gold and silver to decline in price unless there is a government that puts a floor under price. Maybe the Chinese will take that role this time around. The ONLY reason gold prospered in the last depression was because the US government bid for all the metal they could get their hands on and soaked up all supply. It is a myth that gold always does well in a depressed economy. Other than the fact it is a substitute for money we should bear in mind it is still a commodity and those generally rise and fall together. On that basis, serious deflations can be commodity killers and gold would naturally follow the trend down.
Bird, yes,
We will go through a serious bout of inflation in the future at some point, but in the end its catastrophic damage will usher in a serious deflationary phase that will leave no person or asset untouched.
Everything will be lower in price and value no matter what metric you use to evaluate those parameters.
Under such a credit event that you see unfolding, gold, and silver to a lesser degree will have market liquidity and garner a bid, but will be valued at a much lower levels than most star gazing bugs want to imagine.
Under such a change in world dynamics, priorites will change like you never could have imagined.
What the hell just happened to Oats!! Got to wonder if the grains and softs are not starting to tell us they have bottomed or or darned close to it. But a move over 7% is just nuts. Who could have been ready for that?