Could the conventional markets be putting in an intermediate bottom?
Click download link to listen on this device: Download Show
Remember that, as I understand it, cycles move in waves, so all the fundamental reasons in the world don’t matter. Folks new QE was ending a year ago before tapering started, but gold still fell. If we hit a cycle top, then next up is the cycle bottom.
Me, using just TA, agree w/Gary that the S&P may have bottomed today. As for gold, although it rose a bit lately, GDX did not follow, and instead went sideways. Usually GDX leads GLD, so for tha reason I agree w/Gary that GDX will go down further. If it can’t go up, it will go down.
oops – typo – “new” s/b “knew”
Big move in gold in past few days yet hui/xau index amd miners are not impressive. This is not the move one would expect. Miners always lead gold on the way up.
Gary thanks for your comments.
True, but the breakout in the GSR made this action likely as it depicts stress/fear/lack of liquidity. Under the circumstances (conventional stocks falling/fear), I think the action in the miners has been very good —and very different from a real liquidity problem like we witnessed in 2008
Gotta agree with you Mathew!
Always? Dunno whether it is always. It is also probably too early to see whether the gold stocks or gold are going to outperform (or underperform if your glass is half empty!)
I am not wondering if we are going to get a situation like 2000-2001 where stock market topped, dollar continued higher, gold made in 2001 a slightly higher low than oin 1999 and the bull market started as the bear market in general stocks got going. In that period gold and the gold stocks moved inversely to the conventional market in quite a big way and in that case, I think the miners lead gold up.
It is interesting that from 2003 onwards that didn’t really happen again for the next 11 years, gold, gold stocks and conventional stocks market moving up and down together, more or less, driven by liquidity perhaps.
We’re in a very fluid situation here and it is so difficult to make sense of anything these days!
Interesting points Silverbug Dave.
You bet it is difficult to make sense of anything Silverbug Dave!
What do I think? I think you’re nuts if you aren’t getting every ounce pf Physical GOLD, while you still can. The fact that you could— at these unbelievably ridiculous prices is not going to be lost on you…soon enough.
People are looking for safety given all the uncertainty around them. Safety is not found in the stock market.
Thank you, Peter. Hard assets in my opinion!
Gdx is looking too weak compared to the sharp move in gold. We should be at least 1 to 1.50 higher. General market looks like will head further down based on the over 300 point drop. Should be a few more bad days left.
I think stocks could reverse here and go higher WITH the miners until the elections. Gold does not have to break down.
http://stockcharts.com/h-sc/ui?s=SPY&p=W&yr=3&mn=3&dy=0&id=p31999327792&a=371455362
Matthew ~ In my opinion, the times when the US elections influence markets are over.
“Political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.”
I poked around into AXU a bit: It could be that an organizational change, M &A, or de-liting event is on the horizon (I am back in @ 0.60)
Brian – To be clear, I’m talking about a reversal that lasts no more than weeks. As for elections influencing the markets, I think it is the other way around, markets are used to influence elections. The tape is much easier paint higher after quick and scary downside action. I am likely to get short again.
AXU is the ultimate call option on silver at this point, in my opinion. It isn’t going away.
I think the conventional market is overbought and gold oversold. It is true that there is market manipulation to boost stock market and suppress gold. But this is not for the benefit of retail investors. Instead it is to benefit the power that be.
I believe both gold and stock market will go up but gold has passed or very close to the bottom but stock market needs to have major correction before they lure the pension funds and hedge funds into slaughter house. These funds will not jump in with both feet before they see all clear. Most of them have been on the sidelines for the last few years and under performing.
Just my two cents.
We will see a little bounce in the conventional markets, but that is about it. Also, Gary you said we’re not going into recession yet. Where have been these last few years? We never left the last recession. We are in a Depression. The history in the future will record the period as a Depression. I remember my grandfather telling me that during the ’30s politicians and the media used to say the country wasn’t in a Depression, meanwhile the situation on main street became more dire. The politicians are using the same tactics again and people are falling for their lies.
Not even close to true. Restaurants have been packed with long waiting lines. Casinos full. This is just the typical nonsense perma bears spout all the time. If we were in a recession no way the stock market goes from 666 to 2000.
Restaurants are full of the drunks……….having hunger attack after a long night out…..
Casinos …….are the last ditch effort….to strike it rich…with the last buck they have left………….
Not where I live. Restaurants are full of good paying customers, not drunks.
Referring to LAS VEGAS………………….
Are they paying cash….or is it on the credit card……..
Why should the restaurant care how they pay? Secondly most people pay in cash or debit.
they restaurant should ,,,because they have to pay a fee to the bank…….ever owned a business which accepted credit cards………………….
Actually, that is the same case up here Mr. Miller!
Don’t get personal, Jerry!
Sorry AL,, ,Drunkenness is a weakness that must be affectionately addressed. And I will be more careful in my selection of words when describing a partaker of the spirits……….lol………….best j………….
REFI……..THE HOUSE ….BUY THE STOCKS…………..Leverage……..problem , the debt is still there.
Then how do you explain the 90-something million out of the workforce? True, some are gaming the system, but those are a few.
Interesting point, Chris!
Sorry Gary, I must disagree. We can be in a recession/depression and have the stock market at all time highs simultaneously, given they’re just printing money and pumping it into stocks.
Gary….3 casino’s closed on the east coast..Trump Plaza will close next week..Try the restaurants in Orlando…Upscale restaurants are empty…Fri and Sat no problem getting a table…The market is up because of the fed pumping it , . and high leverage accounts……just wanted to mention this…regards!!
We are not in a recession. Things have improved noticeably since 2009. There are plenty of jobs available.
Yes, I like the two hamburger flipping jobs I got last week……I can now flip with both hands…….left and right……..I am thinking I might loose my job to the ROBO next month.
Sorry but these are not hamburger flipping jobs I see in the want ads.
Why are you looking at the want ads……?
I look through all the paper not just the comics like you probably do.
Good catch.
I do not need to look at the newspaper , to get comic relief, I just read some of your stuff…………..
JMiller, if the economy is doing well as you say, why doesn’t the Fed raise interest rates? Why keep these low emergency rates all these years?
I said we are not in a recession not that the economy is doing well. It is certainly much better since 2009.
You didn’t answer my question: If the economy is doing better than 2009, why not raise interest rates just a little? Surely the system can handle a slight uptick in rates if it’s doing better, right?
Chris,
The reason I did not answer your question the first time was because you wrongly said that I said the economy is doing well. I never said that. So to answer your question since the economy is only growing at 1-2%, which means we not in a recession, there is no need to raise rates even a little. They are slowly undoing QE, which should come first.
Nonsense. Look at the labor participation rate.
Or SNAP participation for that matter. Or student loan levels and defaults. This is not a strong economy.
Great commentary gentlemen, but please do not get personal! Thank you!
Things have improved alright. Twice as many people are now on food stamps. Weeeeeee!!!
http://www.trivisonno.com/food-stamps-charts
This is priceless proof of what the socialist Marxists have done to the U.S. since LBJ:
http://www.trivisonno.com/wp-content/uploads/Food-Stamps-Annual-Benefits.jpg
That is only because the government makes it easy for people to get it and many people are taking advantage of it. I know a number of able-bodied individuals who work just part-time and will do what ever it takes to keep it that way just so they can get welfare. I would say at least half of those getting Food Stamps do not really want a full-time job so they are not really trying hard to get one.
The rise in the number of people getting Food Stamps is not a good indicator of the state of the economy but more so on the laziness of people.
I disagree. Relaxing the standards to qualify for food stamps is just a way to keep protesters out of the streets and, therefore, avoid meaningful change. It’s a political pressure release valve whereby politicians plunder those who have incomes and assets in an attempt to silence those who don’t.
About 25% (37 million) of the 150 million or so wage-earners make less than $10,000 per year. The number making less than $15,000/year roughly equals the number on food stamps. Throw in a dependent or three and obviously those on stamps are not living the high life.
It does not matter how able-bodied one is if jobs aren’t available/the economy is contracting.
I would have to agree Mr. Miller!
Not good jobs, Mr. Miller. Underemployed is a very real category!
It would be interesting to see the situation today if the current level of government benefits did not exist!
Bought some OIH at $41.20 this morning. Gotta love headlines like this:
Don’t buy this dip in energy: ‘Fast Money’ traderat CNBC
http://www.cnbc.com/id/102087690?__source=yahoo%7cfinance%7cheadline%7cheadline%7cstory&par=yahoo&doc=102087690
General market is toast for this year. It will not be able to get to 2000 by the end of this year. Buy the dips and sell the sharp short rallies type of thing going on.
For my two pennies worth, the one thing I don’t see happening is a rebound into a blow off top in the stock market – unless the central banks buy up the whole stock market – retail investors are simply tapped out and just trying to survive not gamble what they have left
Good point, Nigel!
Sold my last stock: gdx as it is just dead and dow headed to 300 to 500 down. Gold crossed over the 50 minute average and that usually means it is correcting.
Were you surprised, Paul L, at the magnitude of the reversal toward the end?
Nigel, this is true for the economy, too many people are swimming in debt, the last thing they should do is spend more money they don’t have. The recovery will never happen until The Fat Lady sings, “it’s over” boom, crash, RESET!
A Western tornado is striking Wall Street in full force. Paper profits are vanishing, one more day like today and the margin accounts will start a Niagara liquidation!
kitco have a lot of interest in talking the pm up.Their conflict of interest makes me take their comments with a pinch of salt.Never take opinions from bullion dealers like kitco,Peter schiff etc etc
NO different than CNBC…………talking up stocks…………
cnbc are the worst of them all.IMO cnbc stands for crooks ‘n banksters corporation.Their goal is to lure you into stocks when its too late or almost for the benefit of the call writers at wall street.They are prostitutes of wall street,congressman and snake oil salesmen.They have the bachelors of honors in deception and fear mongering.
You are 100% correct……….on CNBC……..I stopped listening to them in 2000
I still like to listen to Rick Santelli, though.
RICK SANTELLI AND GEROLD CELLINI …..should have a shouting match…….with Uncle Ben and Yellen……………….
J….why did you wait for so long…… he he…
I thought CNBC stood for “constant nonsense B.S. and crap”?
you are part correct…………constant NO NAMES with BS & C
Interesting point Mr. Corleone!
200 day & 50 day SMA’s long gone. It is save my ass (sma) trading now. Dow is not able to hold 16,000.
Just normal behavior during the final phase of an intermediate decline. I said traders would lose their minds and that’s exactly what is happening.
The last few days of the blood bath phase are the worst.
Incredible buying opportunity coming. Get ready.
Keep up the good work gary.I follow you every day and imho you are one of the best analyst out there.
Don Viito, May your first grandchild be a masculine one.
BB
Come on, Mr. Tracy we all know there is no wisdom in holding real gold bullion, why the paper market has all of those gold holding psycho’s covered.
Paper Tiger…………………
GOLD might close out at 1250………
Platinum and gold are almost 1/1………. .99ratio……there is a buy in the air.
Don’t bite your tongue, Dick!
Looks like the fed will cry uncle pretty soon and start QE4. Only question is how much per month. My guess is 150 billion a month, and if it happens, gold will explode despite the obvious government manipulation attempts to hold it in check.
At this point ,,it does not make any difference in the amount……..
There may be a lot of shocked equity bulls out there once it dawns on them that the central banks think they can hand off the stock market to the real economy, or worse, that the policy elites are trying to devise other policies to generate inflation besides just shoveling a bunch of money at the very people who caused the last crisis. The central bankers either believe the nonsense about central banker omnipotence, or, they are divided regarding their own policies. Just look at what the Germans were saying about not wanting QE. This grand monetary experiment is having all sorts of unforeseen consequences and I don’t really believe that the CBs no what they are doing at all.
Best of luck to anyone trying to retire off the S&P.
Gary never addressed the fact that QE ends this month. That has to be factored in to this stock market drop.
I just sold my first chunk of few hundred shares of Silver Bullion Trust I bought at the exact low and made 6% profit. I am raising cash to buy energy and general stocks in the next few weeks. I am sure that market will go up after this correction. I am looking for ~15% correction from top S&P ~ 2020.
Is margin call coming after this big fall?
restaurants: I am a partner in maybe 20 different restaurants–margins have been decreasing–average check decreasing—-a bit less alcohol and fewer appetizers and deserts sold. Thats for the consumer–the business restaurants are holding up-OPM.
I believe the input cost is way up. Beef and pork price is up double digits, Right?
Canadian or American, Hal?
Let’s stick with Gray’s basic calls. Gold to 1050 and the stock market to blow off to well above September 19th highs. The exact day of this stock market bottom is not that important. We don’t have to believe it or like it, but that is his call. I don’t personally agree, but respect willingness to put his reputation is on the line.
As do I, Chris!
too many variables–what if sunday the fed announces it will not end qe?
Obviously QE have been so effective in creating jobs and improving the economy.
Very likely. Maybe QE++
Just caught the bottom on gdx and added some again.
Got out again. Will get worse again into the close.
I can see the logic of gary’s perspective–it’s something to watch out for
on the other hand also look out below for general market– So I have been buying calls and puts. Can easily have big moves either or both ways and friday is equity option expiry to make things more interesting
Thirty more minutes to go. If we close positive then i’m going to think the odds are good we just formed the intermediate bottom today.
Classic ICL bottoming sentiment today. Traders concocting all kinds of crazy end of the world scenarios. I’ve seen it happen many times in the past.
It cannot close positive. Cutting loss to half is possible. How about stock drops to the end. It is really bad.
Some perspective now at about 1230 PM PDT. Gold cannot even hold 1240 on a day like today. It has now dipped below that. While early in the day there was safe haven bid for gold, I think the 3 U.S. data points released today showed that there is still no reason to worry about price inflation. Without that type of inflation, I cannot see gold doing anything much. In case I am wrong, I still have my CEF bought last week to help me some.
If the Fed swallows its pride soon enough, I think they will soon launch some type of another QE program. However, the last one did not really help gold. I am not sure a new QE program would help bring the price inflation they want.
Price inflation, it will not show up in their stats. It is fox guarding hen house. You’d better go to independent stats or simply go to supermarket
I am not looking at their stats. I am looking the last many months at crude oil, corn soybeans, wheat, a general commodities index, and also looking at Treasury yields and TIPS spreads. All these things are indicating to me what Mr. Market thinks about any need to worry about prices getting way out of hand. Now the situation certainly may change, but I am not seeing a change yet.
6:30 p.m. pdt and it is just a bit above $1240, Derek!
Inflation is different than financial asset inflation. Again go to look at supermarket. Real inflation should be what people buy for consumption not what they buy for speculation.
Wrong place.
You are right, of course, and very smart. As a vegetarian, perhaps the things I eat causes me to see things differently. I will say that the price at the gas pump has been going down, not up.
What I am trying to get across is that the perspective seems to be that there is little need for gold right now. Just not seeing strong Western investment demand for gold. The CPI index and the PCE index certainly do not show the complete picture. But something is causing big investors to look elsewhere than gold. I think we’d need to see CPI of 3-4%, which is probably something like 7-8% the way it should be/used to be calculated, before we’d see a flock to gold for protection.
Derek,
Gold is inflation hedge and will continue to be. What cause investor to flee the gold market is FED and west intervention. Investors speculate. However, as fiat currency in the economy increases, the supply demand balance of gold and currency will tilt toward gold since more money chases same amount of gold. This may come as more people buy jewelry, in particular in the East. I remember it cost several months’ salary to buy a gold chain in the 1980s in China and now they can buy several in a month. They will buy more. When the general price level goes up, even people in the West will start to buy gold. At same time, US and Europe will run low on their gold inventory they have accumulated for centuries. They have to stop somewhere. In a long run, gold will catch up with inflation. A report says that US is worst on gold investment among west countries so people are ill prepared for the eventual financial trouble. I can see the richest countries in the history always had the worst fall since people became numb due to good life. They cannot imagine what is coming.
Don’t you think that it depends on your time frame!, Derek.
A bit undecided here. The market didn’t close positive like I wanted to see but we do have a huge 40 point reversal. Let’s see what tomorrow brings.
Still looks like a great candidate for a lasting low to me. Check out the volume.
http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=0&dy=0&id=p98348250978
look out below………………………
thanks for the chart …….Matthew……….
BIG AL……NEEDS TO POST THE VOLUME CHART………..
Gary, FED is almighty but it does not work for us. I think you are right that stock market has one more leg up but we need to clean house here first . The market has too much excess. Without good correction, people who stay on the sideline will stay there forever, pension funds and insurance company in particular. They need to get in before GS makes a major killing.
GS……….is going to make a killing either way. The Fed has their back, the Treasury has their back, the Justice Dept. has their back……..The Pope has their back, well, on the other hand,
I hope god does not bless them. but Satan might.
Didn’t GS’s Feldstein(sp) say he was doing God’s work…….
He got his trade mixed up……….short changer and money changer
Anytime you want something posted, Jerry, let me know and we will do it.
thanks AL…..I thought Matthew’s chart was a good one…………..j…….
OK, hands up who pumped the DOW 300 points?
I have to confess, Bob!
the biggest disappointment here has got to be the miners. Physicals all up, miners flat.
They always like this. Gold has up many fold but miners have declined. Without much higher gold price, their margin will be squeezed. I will not count on miners . Buy gold directly. Manipulators will make sure miners barely hang on
AL–restaurants are in US–big city upper end.
also, if you notice at least here in US lots of deals, early bird, group on, restaurant .com, and several others.
The other day I drove to Ohare via surface roads–almost each strip shopping center had vacancie”S”
Office complexes high vacancies–and consistent. Tells me economy is dying and tells me good deals are there so RE owners–cannot see how the reits are doing so well, also who owns the mortgages on these places which usually have 5 year balloon mortgages and when they come dues the mortgage holder will not renew same dollars if there are vacancies. Creates a huge problem.
Gary is out to lunch. Gold trading inversely to stock market? Yah right. Smart money is leaving and then it is going to rush back in? for what reason? because earnings suck, there is global instability on many fronts, no more QE, I could go on. Gary you are brutally wrong in my opinion. I will gladly eat my words if we see to massive reversal and gold decline.