Whether it is next week or within the next five years, it will happen.
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Chart of the day
http://blog.smartmoneytrackerpremium.com/2014/10/chart-day-39.html
Gary
What leveraged ETFs (3X) do you use for bull moves in market (S&P, Nasdaq, DOW)?
Brian
Google ultra ETFs and you can get a list of all of them.
Even julius ceaser has got his back covered by brutus and one day oops !!
Big Al, here is an interesting article: http://www.zerohedge.com/news/2014-10-28/us-homeownership-rate-drops-1983-levels-heres-why
BTW, great interview.
gary the technicals on the monthly charts are not looking good.Near crossover on the monthly smi and williams%R bottom trendline from march 2009 is very near to be broken .I would be gambling if I long the market at this stage.I respect very much your opinion but risk reward is very high for my taste imho.
The risk reward was great two weeks ago but no one believed me when I said the market would bottom and go back up.
If you can’t buy when the risk reward is high then whats the point of worrying about it. You aren’t ever going to buy at the bottom anyway.
The Fed has given you a free pass but you can’t pull the trigger and take it.
Yes gary but this could very easily be a retracement;that is why I prefer to wait for further confirmation.Usually wave 2s are deep.Besides that the divergence on the weekly macd and rsi does not bode well too.
You said it would challenge new highs. S&P bounce has levelled off and will require the Fed announcing QE to continue higher. If QE is dead watch the S&P die.
I fully agree with you peter.It all depends on tomorrow’s fomc meeting imo.If qe is terminated tomorrow then s&p will drop like a hot knife through butter no matter what the federal Reserve Bank of St. Louis President James Bullard and his accomplices say.
Don, I agree with you. It’s all about what Yellen will say at the meeting. Bullard is not even a voting member (somebody can correct me if I am wrong on this), so his opinions don’t count as much. For all I know, they sent Bullard out there to say something about QE4 in order to suck any remaining suckers out there. Who knows what the Feds plans are…..
Peter,
“If QE is dead watch the S&P die”
That’s what everyone is expecting and that’s why it isn’t going to happen. Remember the Fed isn’t removing any liquidity they just in theory aren’t adding anymore. And that is debatable since we are never going to audit the Fed.
Oct. 15th,
“Gary is out to lunch”
I think it’s time for a retraction don’t you? I was the only one who called the bottom.
You were not Gary! Don’t irritate me. In fact I also called that bottom and wrote:
” I am not the slightest bit put off by these recent declines. I have a very high degree of confidence this is just a minor and long overdue corrective phase that is an opportunity to get back in at better prices. There is a mountain of money coming from both Europe and Japan that will ensure the life of this market for a long time yet”.
And furthermore I also wrote the following to you……
“My belief is that US equities (S&P) will rally now and exceed their past highs into the end of October or early November but that we will retest the current lows before the year is out”.
At which point Doc responded:
“Bird could be correct about the general direction of the conventional markets but it won’t happen as quickly as he would like for a new high”.
(PS……..I will be right Doc!!!!!! Only 30 points to go on the S&P and the week is still young. Shocking man……totally shocking)
You made your point in a polite manner, Bird. Thank you
I have taken a liking to Gary these days, Al. He is making a lot of sense a lot of the time and doing some really interesting interviews. But I still have to remind him he was not alone in calling that bottom!
Bird,
I don’t read all of the comments all of the time. I guess it was just me and you calling the bottom two weeks ago.
Fair enough. All is forgiven. Birds just fighting for his share of the feathers.
gary when I say risk reward is too high I mean too high risk for little reward.
Gold loves moving sideways.
Not for long Peter. It usually falls on an Fomc statement and we should be prepared for it to repeat that process this time around. In fact this current lack of drama only tells me another decline is on the way. We will see action within a day or two.
See my notes below, Peter. I actually had a change of heart overnight after giving this more thought so I will withdraw the remarks about gold taking another dive on this FOMC.
Because basically it makes no sense that the end of Taper would be followed by further declines in precious metals. Falling gold is communication of further deflationary headwinds coming. It says that the economy is stalling out and leaves the suggestion that markets will weaken.
That is the wrong signal. Why would the Fed send a deflationary message on the same day it was ending exceptional accommodation? I just realized this as I slept (no matter how dumb that may sound).
But when I woke up this morning I had an OMG moment and realized that gold MUST respond favourably today if the termination of easing was to actually makes sense.
Bird,
As you can see from our editorial with Gary, I am really in a wait and see mode for a few hours here. I have given up trying to predict the market action before events occur. These markets are absolutely too crazy and irrational!
You are right chris.Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee’s assessment of the economy and policy options but they do not vote.Like Bullard there are 10 others because the reserve bank presidents are eleven in all Boston, Philadelphia,Richmond; Cleveland,Chicago, Atlanta, St. Louis,Dallas,Minneapolis, Kansas City and San Francisco
This was a very interesting interview. A lot to chew on.
Before I respond I really need to take a step back and collect my thoughts…
Ya know if the stock market is like a ballgame, then the “winning” team (The Fed) must be like the 1919 Chicago Black Sox — Mostly crooked.
Gold asleep but ready to end the correction. I bought into gdx again. Sold my cybr and loco just before they spiked up sharply missing some massive gains as I thought the general market should correct now.
Is the CDNX’s 200 dma about to have a Wile E Coyote moment?
Gary are bullish on xle? (I assume you are based on what you said early last week.)
E,
Yes
Gary rather participates in a bubble and risking being the bag holder than buying low in gold simply because he is afraid of the 20% drop. Who is certain there will be 20% drop and who knows there is no 50% drop in the market?
For me it is the exact moral hazard the FED wants to create – an opportunist action. We have two 50% drops in stock market already. If bankersters use this strategy wisely, they can create a two tierred society.
Lawrence,
Hell yes I’m afraid of a 20% drop. Apparently you are afraid of a 20% drop in stocks, but not afraid of a 20% drop in the metals sector.
How does one rationalize that?
The probability of a drop is high when stock is overvalued but the chance is low when we are at low in metal. It is called risk and reward。the upside is so high for metals so a small chance of risk of 20% drop worths it. Stock upside is limited so the risk does not worth it. It will get back in November for stocks if there is no crash or wait after the drop stabilized. I still think stock is not topped. I just got out in early march thinking risk was high.
On BNN today; 48 idle reactors in Japan. A city with the population of 100,000 voted to start up two reactors as their energy costs have risen quite a bit in the last 4 years. Cameco not leveraged to spot price but many juniors are. I own shares in one junior. Just a heads up IMHO that uranium may have bottomed at $28.
I am with you. Uranium stocks are still dropping despite all the bullish news
Am I being a bit thick here but isn’t there a reasonable possibilitiy of a bit of a panic in the coming week now that QE ends in the next 24 hours?
Bob, it depends. If Yellen is dovish and hints that there might be QE4 in the future, I don’t think there is going to be a major selloff. If Yellen says no more QE and interest hike in the near future, then there will be panic. Luckily for us we will know all the answers in the next 23 hours.
My thoughts exactly Chris.
Seems to me that the sensible thing is to wait 24 hours.
At this point in time chris, I don’t see her saying no more qe and an increase in interest rates. Timing for that comment is terrible.
Agreed Big Al… why would Yellen open her cards…. just bluff and see what the market will do.. (no saying of QE… “considerable” intacted for interest rate.. IMHO)
I think that it is a real wait and see Bob UK
It would have begun months ago. The end of QE is no secret. We’ve known exactly when it’s going to happen for almost a year. Not too mention we just had the panic and it has been erased faster than it occurred.
What panic Bob? Few events in the life of the Fed have been so clearly telegraphed. Even if the Fed wanted to undertake more QE there is little left to buy that would not create unnecessary demand or create market distortions. I think the market is aware by now that sufficient easing has already taken place to last a decade. Keep in mind, none of the past liquidity efforts have been withdrawn so there is a lot of money already sloshing around out there.
Yep, there is a lot of money already sloshing around out there!
omg.. this is true… so no more QE now but focusing on low rates and inflation in your opinion?
You got it Genesys. Where else would the direction send them? If you turn on the fire hoses and point them skyward it is just a matter of time before it starts raining on somebody1
i believe the collapse will be severe and waiting for a trend downwards will be too late!
That Robert is an interesting observation!
BUY GOLD THE ELIET WEL PLAY A NR THE WESTERN WORLD WILL NEVER ????????? 9 9 2001 YOU NO SEE COMING YOU WILL SEE COM DISSSSSSSSSSSSSSSSSSSSSSSSSSSSSS I TELL YOU !
ZIRP…….ZIRP……ZIRP
birdman says Bo is pandering…why?
Can’t he just be wildly bullish on gold?
I have no interest in Bo or his calls. We both happen to agree a bottom is in for gold.
Why is he pandering and not the johnnie come lately who are making ridiculous calls in the other direction. I heard $900, $700, even $500 gold.
These are made by trolls who are trying to make a name for themselves.
I seen these bears come out of the woodwork for 15 years now always trying to be the one to call the. End of the gold bull.
They get slaughtered, disappear in the talls weeds for a a while, and then come back under a new name.
The gold bull has thrown everyone of them off its back.
They missed the move, have a chip on their shoulders and want a bear. Trolls.
And why are the ones who are not simply play by play also pandering.
I would rather take someone who makes a hard call and sticks to his guns then these others that are just doing play by play clocked in unbiased objectivity. And they know who they are.
Howdy James,
I agree with you. I just have a problem with people who charge exorbitant fees for “advice”. (In either direction, by the way.)
You know the old saying about a broken clock, don’t you? I mean what good is a call when the timing is wrong.
I mean I can call for $2K/oz gold and not give a time. What good is that?
Not saying that his call is wrong. Just reminding you that there are a couple of months left for it to be correct. Also asking the question, so let’s say it comes to pass at some point next year would that be a particularly accurate of the gold market?
And James let me add one other thing.
Let’s say (hypothetically speaking) that we all (KE Report) say in February or thereabouts that conditions have changed and we believe (and that would include you and all of our contributors) that the bull is now definitely in.
Whose opinions are more valuable? Those who wait and really assess what conditions are or those who made the prediction a year or two before?
Im still sticking to my guns of low $900 gold (at best)James.
If that makes me a Troll in your eyes ? Then so be it, I’ve no problem with that, I’m thick skinned.
…..I’ve been called worse than that many a time.
Cheers.
If gold eventually falls below your bottom call James ?…then what ?
Are you a self described Troll James ?…..I’m curious.
….or will you blame it on manipulation too ?
We all simply have different opinions, Skeeta and James. Does that make those of us on the wrong side of the trade bad or stupid? Heck no!
I can hardly recount the times I have been called a gold Troll by the gold-bugs Skeeta. Yeah, a thick skin helps. They mostly do that when you are right and they have run out of rope. It goes with the territory I suppose and its mostly just words.
I respect you, Skeeta, for sticking to your guns. At this moment in time, who’s to say. I personally don’t agree based on what I know, but so what!
Bo is just telling the bulls what they want to hear James. There is no coin in being bearish where gold is concerned. You need to understand the audience will pay for positive advice even if it is wrong before they will pay for negative advice that is dead accurate.
Al, you make valid points.
First, I have no idea what Bo charges and would never advocate subscribing.
Two, I have no problem with advisers who state they are not sure at the moment.
However these advisors, imho, are not just waiting. They are taking swings, and mostly missing…
Mmost do not say they are not sure. Have you honestly ever heard that?
I would also have to add – it is a big difference to say “no play” first, then say “conditions have changed” and then declare your play then saying…
“Here’s my play”, then say “conditions have changed”
You can’t hit a moving target
Gary is saying we are in the 8th inning of this bull market.
Most people agree.
If you missed this move do you really want to jump in the 8th inning?
Talk about missing the wedding and showing up for the funeral.
Do you really think as you say you can stay well informed, be nimble and time your exit.
You and everyone’s brother is thinking the same thing.
Gary doesn’t understand markets don’t work that way.
The end of the bull isn’t going to come gift wrapped.
The FED has your back he says.
Who has the FEDs back?
When confidence ends, so does the confidence game, then it doesn’t matter what the FED does.
I agree James. By the way, I have my own back!
If the markets are as distorted as everyone thinks, I don’t think the reversals will be orderly
Many years ago I bought Nova Gold, I paid around 6 bucks. A few years later the stocks went up to $21. I called up my stock broker to sell it, and many of my other stocks.
She said there is no need to sell, we can do sell stops.
Not really understanding all the nuances of this, I trusted my broker and agreed.
A short while later Nova Gold had some issues with one of their mines.
The stock blew right through the sell stops and I ended up getting out around $14
It was very disappointing.
Moral of the story – don’t listen to your stock broker.
No. Well yes.
But the other moral – don’t think you have it all figured out.
I learned a valuable lesson which was definitely worth it
James, I don’t buy into the crazy low figures for gold either. Five and six hundred an ounce are numbers that might suggest nation breaking levels of depression and deflation and are as ridiculous as Sinclair’s 50,000 dollar call.
I do however have a long standing call on gold reaching a final bottom at 968 which I believe will be reached in 2015. The longer we stay above support near 1190 though the less likely we will see anything sub 1000 so I stand to be corrected in my estimation for a final spike low.
So time matters and as we have seen gold is doing a good job of resisting further blowout declines. Silver meanwhile has already hit the bottom I predicted and that has thrown cold water on my idea for lower gold. Mostly because the precious metals move together….even I have to question how gold can fall further if silver has hit bottom.
Even Goldmans call of 1050 is beginning to fade and look less threatening. Right now we are at that key juncture that will determine the outcome for the rest of this year. The miners are what I am most interested in and I will concede that it is looking more likely they will bounce than fail this week.
A lot seems to rest on what oil prices do since they are such a major component of mine costs. If crude keeps falling or holds steady in a range then a lot of active miners can start looking attractive again and revenues should soon begin to improve.
The combination of even modestly higher gold prices and lower fuel and input costs would make a big difference to a lot of those companies right about now.
One thing that has me really interested right now is that the GSCI (Goldmans Commodity Index) looks to me like it has bottomed and will break out soon. If that comes to pass then it means inflation expectations are on the rise again and gold will almost certainly benefit.
Already we have seen significant movement in the grains complex despite so many insisting that they had further to fall. I refer here mainly to corn and wheat, both of which looked like unlikely candidates to go positive considering the bumper crops.
Well the charts don’t lie. They did indeed bottom and were great buys despite those who stated bluntly that there was too much corn (thus suggesting anyone taking an interest needed their head examined). I had been amongst those taking a serious interest and discussed this many times throughout the summer.
Anyway James, you probably are getting a better idea of my thinking here. I am currently leaning towards supporting the bullish stance on precious metals and most particularly the direction of miners.
I think the market is looking for signs of inflation as well and now that the Taper is finished even the Fed will greet signs of price growth in the economy as a very positive signal. In fact we should expect exactly that.
Just ask yourself what they need to let them off the hook where interventions are concerned. First and foremost it is a belief in the investment community that the deflationary trend has been arrested and that past liquidity efforts will finally start showing rewards.
Yesterday I postulated that the next Fed meeting would see gold get squashed again (as usual) but I need to take those words back. After giving it more thought last night it now seems much more probable that gold will actually do the opposite!!!
So I have a revised scenario where gold actually breaks above 1250 this week. In fact it is my belief the Fed will use language that is supportive of instilling inflation expectations and anchoring ideas along those lines as it will be loathe to introduce more accommodations. Instead, they need to get across the idea that past accommodations are already more than sufficient to light a little inflation under the market.
GDX is currently right at its lows of support. I would now say this….if it moves up on the Fed outlook, then buy it because we may just get the signal that the bear market in metals has come to an end.
In short….I am gold bullish until further notice.
Great comments Bird!
Cheers Al……lets keep a really close eye on this. We could finally be at a turning point. I will have to eat my words about deeper declines of course. But so what? We roll with the punches or we get squashed and I sure as heck don’t want to be that guy who was a stick in the mud when the market changed direction.
Of all the things I have learned the most important may be this;….We MUST remain flexible no matter how certain our past theory was and no matter how badly we are criticized for shifting gears. I have often stated “don’t marry the trade” when I spoke of gold. That goes both directions though.
We won’t marry the bear either!
Any spike in inflation will be no more than temporary.
Worldwide Deflation is coming like a blast from a shotgun.
Sure looks that way, Skeeta. I bank on the markets being irrational though. The way it has priced stocks is for a boom in profits for many years to come. You know, they say that bond markets and stock markets take different paths but over the long run bond buyers usually get it right. So if rates are still falling then lenders are pricing in some pretty sobering economic performance for the future. When I suggest gold may start to rise it is because I have a belief that this action is a powerful arrow in the quiver of the Federal Reserve. They could revalue the dollar overnight and achieve a significant devaluation against the Euro. But I certainly don’t see that as the agenda! A modest climb in gold prices is a sufficient signal to convey an inflationary trend without blowing other currencies out of the bathtub. But its a dangerous game if demand ramps up too fast. I guess we will have to wait and see. The market has made a fool of me before!
It has made a fool of all of us at one time or another, Bird!
As did I James back in about 1984. Nobody is the prettiest baby in the nursery!
Thanks for your thoughts today Gary.
Deflationary pressure is gonna squash commodity prices.The money that they printed will be all gone when the stock market reset.Everything will turn to default mode and stock markets will continue from were they left in 2009.This spike was artificial to say the least and it was possible mainly due to buy backs from the listed companies themselves and central banks.The fed is trying with all his might to prevent deflation but it is something that you cant escape of like death.The fed is tempering with cycles i.e. with the law of nature.He cant go on for long.Ultimately he would have to succumb to mother nature.Gold is not gonna to fall in one straight line btw.Every correction comes in 3 waves.We are in the final part of the 1st wave atm whose target is in the range of 930-1111.
I am not so sure, Don. We still have the Millenial generation coming up behind us and it is bigger than the baby boom generation. We really only need to keep the economies head above water for 6 to 10 years before that tidal wave of people lifts us back out of any deflationary trend we might be living in. So there is an end to all bad news. It is just the waiting. I suspect interest rates could be held low for another five years if there was cooperation amongst the worlds Central Banks (and nobody did anything foolish in the interim). Genuine organic growth could start kicking in fairly soon actually. We are talking a half decade at most. I just wich I knew how it will all fit together in the big picture. The economy is a damned Rubic Cube.
Yes it certainly is a rubic cube.
Will genuine organic growth eventually take over? That is certainly what the govt is counting on by its actions.
Interesting views, Don!
Yeah the economy has become like a maze.That is what happen when central banks temper with the economy.Nature has always been a series of boom and bust.It is the law of nature.I call them cycles and when you temper with cycles the consequences wont be nice.There are many factors that could lead to a stock market collapse.China housing bubble is one big factor.If that bubble bursts the ripple effect will be felt all over the world.A pandemic desease could be another factor.The gargantuous amount of derivates that the too big to fail banks hold is another factor.They could trigger a financial collapse of out-scale proportions.A sovereign default is another factor.If greece defaults on its debt,italy and spain will follow and those are the two big elephants in the room.The exit of any eu country from the eurozone is another factor.The downgrading of u.s. debt and ultimately the demise of usd as a reserve currency.
I totally agree, Don C, that there are many things out there that could lead to economic disaster. Are any of them going to occur? I would think so!
I listened to the interview with Rogers and it was actually Albert Edwards who said run for the hills.