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Market wrap after an interesting down day for the markets

December 12, 2014

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11 Comments
    Dec 12, 2014 12:17 PM

    AL ! AVI GILBURT NEED TO FOLLOW ! https://www.youtube.com/watch?v=BKHKmEtpWao

    Dec 12, 2014 12:50 PM

    The Elliott Wave Principle is also thought by some to be too dated to be applicable in today’s markets, as explained by market analyst Glenn Neely:

    “Elliott wave was an incredible discovery for its time. But, as technologies, governments, economies, and social systems have changed, the behavior of people has also. These changes have affected the wave patterns R.N. Elliott discovered. Consequently, strict application of orthodox Elliott wave concepts to current day markets skews forecasting accuracy. Markets have evolved, but Elliott has not”

      Dec 14, 2014 14:17 AM

      Paul Coghlan was taklkng on one of his videos about his analysuis technique using pitchforks, slopes and also the Trident system that Rick also likes. I would respect his opinion and he said that talk of manipulation in the markets didn’t ever stop him from analysing the market. Probably then, changes in market technology would not change them either, merely they would facilitate faster trading and enable people to make the same mistakes but in double-quick time!
      Regardless of the techology, human nature and psychology does not change much, still greed and fear. In that case, why would Elliott Wave not work in any century?

    Dec 12, 2014 12:58 PM

    Let’s see if Nenner is right: “Nenner thinks the bottom in gold is close and contends, “We can still go to $1,150 (per ounce) “. Well, not too bad right now …

    Dec 12, 2014 12:16 PM

    Good follow through interview. Things do seem to be in a neutral position that could tip either way next week. There is no real trend in the PMs lately.

      Dec 12, 2014 12:24 PM

      I should note that there has been a slight upside tendency with the PMs in December, but it has not been a strong move with conviction. Gold has been unable to bust through the 1240 region all week. Platinum has been stuck in a channel between 1190 and 1240 but is trending to the upside of at least it broke a 1240 level. What is amazing is how closely priced Gold and Platinum are right now.

      The one bright spot is Palladium which has been trending slightly up, but not rocketing up. The PMs should pop next week, or I fear gravity will start pulling the whole sector down. The real wildcard could be a weaker dollar and strong oil next week, which could give the PMs a much needed boost.

    Dec 12, 2014 12:04 PM

    Never bet on anything going up in price on the markets on a Friday.

    Dec 12, 2014 12:42 PM

    CME group announced plans to impose trading collars for precious mtls.Begining dec. 22,2014 gold trading will halt after intraday move of $100 from previous close, while the same rule applied to silver after a move of $3. so why the sudden rush by CME to institute collars??? what do they know that we don’t?

      Dec 14, 2014 14:32 AM

      You might almost think this idea was implemented at the bottom of the gold and silver prices ranges (the end of the price declines in other words) as a means to prevent a disorderly rise in price during a future liquidity crisis or some other major market event……and you would probably be right.

      We should all be prepared for a flight to alternative assets if and when a financial event such as another major bank failure or sovereign default arises. This is just to be expected anyway.

      One way of balancing excess credit issuance of the past is through the process of a failure of the creditor to pay. Is money not destroyed under such circumstances and are some of the excesses that had been manufactured through the largesse of Central Banks thus reduced?

      Certainly the savings of bondholders would disappear and in that way some surplus capital that had been ginned up at an earlier time would be withdrawn via a default making that money more or less just a theory but no longer a fact.

      I think investors sense this intuitively and understand that when large debts are abruptly cleared from the books through a refusal of payment that money itself has suddenly become a little dearer.

      And thus we would expect to see a rush (if not an actual stampede) during the moment of crisis into assets that investors felt more certain about. Gold, silver and other commodities like oil meet the conditions of representing money during a period of transition or upheaval in capital markets.

      Those are all a means to store money and protect its value in more physical formats while an unwinding takes place in the financial sector as a forced rebalancing through defaults cleanses the surpluses of the past.

      In our case, credit has been building for more than six decades. What few people doubt is that the reversing entries to bring this long credit expansion back into balance will take anywhere near as long to bear fruit.

      Investors will almost universally demand a fast reconciliation so they can get on with their lives again rather than an agonizing multi-decade decline. This is evidenced in the manner that most bubbles burst. The initial declines can be abrupt, even severe, after many years of price growth.

      In any case I believe it is a given that as so many countries have become so heavily indebted and that as their economic expansions seem to have arrived at the point where no further growth is possible that what must happen next is debt itself that had been taken on by those entities will be extinguished.

      Sovereign defaults will be a part of our lives in the future.

      That is just part of how money dies. The trick for the investor is to understand that this is an essential stage of the economic organisms life cycle and that if they are to survive it and cross over to the other side whole they might be wise to store capital in traditional forms that are almost universally accepted across the globe.

      That does suggest less dependance on risky financial assets and debt instruments and more focus on commodities, resources and productive assets (companies). The CME no doubt recognizes what all of us are aware of already and that is that some danger lies ahead for markets as the necessary default process gets underway.

      Circuit breakers are really intended to make this process less destabilizing.

      In the meantime none of us needs to be fearful of what is taking place. This is really a very natural part of the business cycle and it is one that has repeated itself endlessly throughout history. We will see a rush into gold and silver and oil and other traditional forms or money at some point along the way and this event will as usual come as a great shock to those who refused to learn from the past cycles and economics history.

      It may come swiftly or it may come in stealth. We never really know for sure. But the day it does come you will not be wanting to be amidst that heap of financial rubble that results from the contraction that inevitably follows every expansion of its kind.

      These will be the days when asset values like those of homes and farms can wither relentlessly, when debts issued to the risky and unworthy become worthless and when junk is tested and indeed found to be junk.

      So if your wealth is to cross this Rubicon, some of it must be parked where its value will remain essentially intact until the trouble has safely passed overhead. Especially as this particular credit bubble is quite a lot larger and thus unlike any other in history where magnitude is concerned.

      Let history be a guide. We can choose to be victims or winners in this economic drama.