Potential troops in the Middle East and Greek dominate the headlines as gold breaks $1,222
Click download link to listen on this device: Download Show
Good interview guys. I thinks we’ll get the bounce soon, but agree that it likely will not take out 1347 or 1382, especially if it got down to 1206. It would be bad to take out 1220-1218 support. It appears gold is not going to reverse the bear market on this short uptrend, so it wants to head down into the late spring/early summer to test 1140-1137 again. If we go below then 1050 comes in range. This should be the final bottom in the Gold bear market and where the fund managers will come into the marketplace.
I meant the spring/summer low. I have no idea of 1140-1137 will hold, or if 1050 will hold, and neither does anyone else. However, when that low comes in, I expect sentiment will be terrible, the market will be washed out, and this will be a fantastic entry point for a long term holding.
I like your views Shad. I have yet to disagree on single post you made.
Thanks Stewie. I appreciate you posts as well and read them everyday. I also usually laugh at one or two as well. Keep it up my good man and may you do well!
If there is to be a correction down into the late spring/summer, there is the best I can make of it for correction support levels:
1) I am using 1180 because there are 2 important levels. A low on July 30th, 2010 of $1181.40, and a prior peak on Nov. 23rd, 2009 of $1176.70. I see that range of 1177-1181 as being a support zone and so 1180 is around number that some may use with stop loss positions.
2) I am using the 1137 most recent low and as the next level of support, and that will be an obvious level to everyone.
3) I’ve been using 1050 as a nice round number on the next step down, but probably should be more specific at $1044.70 from Oct 30th, 2009.
4) after just spending a few minutes to review things below that, I really don’t see support again until the Feb 20th, 2009 peak of $993.20.
So we are at 1219.40 right smack in the middle of the 1220-1218 zone. This is a crucial level of support that must hold if we are going to have any juice on the upleg to get past 1308. If we go down to 1207-1206 as Rick, Birdman, and Glen have mentioned they see as a target, it won’t pretty in the late spring/early summer.
If we can bounce from this level into the close today that would be much better and likely has marked the bottom. I’m willing to risk adding a little more JNUG at this level as a second tier. Going to watch very carefully the action from this point.
Well we are continuing to hang in near 1220-1218 level, so the support is holding, but there sure isn’t much conviction to the upside. I’m happy to have hit the 1232 target for Friday and Tues, and this target around 1219 today, but I’m not seeing much strength in Gold. The stocks however are holding up better than expected so far. I though GDXJ would hit $24.79 on Golds move down to 1220-1218 zone, and it held above $26 all day so far. Many times the last 30 minutes is very volatile though, and I am waiting to add to my position in JNUG until I see how things go in this last hour of trading. Happy investing to all.
Well, it held the 1220-1218 level all day, so I anticipate there could be a bounce from here and just added a little to my JNUG position. At this point I am about 50% in, and feel there was strength here that held most of the afternoon.
I wanted to point out that this level also correlates with the Jan 6th peak of 1219.30 pretty closely, so that was another contributing factor in my decision process.
What does everyone think the odds are that it will it bounce from here?
Looks like we got a whoope cushion bounce yesterday, but got a little better movement this Friday morning. Is this the beginning of the 1-2 week leg up?
Thanks for pivot point Rick. I’m hating that g-stocks are holding up. Hating it.
Cory, I don’t remember anybody discussing 1222 as a target that is in the title of this editorial. Was that Rick’s target?
Well, i am more than 80% of the way to my bottom target in the 1200 range but if we only get to 1206 that’s just fine with me. It means I will have seen my 100 dollar decline from the prior peak so its a happy thing.
1207 has been a target on my mind i did not share prior or maybe I did. Bird mentioned 1200 but 1207 looked good and I never ruled it out.
Good call by the way Bird.
woot woot lol
Thanks Glen. Right now I am favouring gold dropping below 1206 / 1207 because I think it will violate the trend channel to the downside which means the bear is still alive and well. If it holds above those numbers though it establishes another lower low and my outlook will have to change to a more bullish stance.
Birdman
You spend a LOT of time posting on this board.
A serious question:
Do you just write about hypothetical situations regarding the markets, or, do you actually buy/sell stocks, ETFs, PMs, etc?
Just curious.
Brian
He’s paid JPM poster that gets paid for posting imho
Does my posting bother you Brian? Because frankly I have been thinking of giving it up and going back to gardening and birdwatching. This place is really giving me stress lately.
Bird,
You mean temporary bullish stance? as in a bounce?
Yes, a temporary bullish stance. I think the bear has not ended but that does not mean you can’t take advantage of the bounces when they come exactly as the declines are predictable (at least to me).
Bird,
Thanks for clearing that up. As I’ve stated in the past I welcome all calls and thoughts.
Is there anything absolutely anything on the chart that may get you to change your stance currently?
By the way which is your go to chart?
Daily
weekly
monthly
I know they all paint a different picture but like to get your perspective.
If you had to chance only one main indicator on a chart, which would that be..
Sorry for all the questions but im quite curious.
Thanks
I meant choose.
No Glen, the chart is still pretty bearish. But I am optimistic it could turn around in a few months time. For now I am watching as gold rolls into its next lows. Trace out the lines on a weekly chart to get an idea what I mean. I think we need another low or at least that’s what the trend is telling me.
I use all the major time charts, by the way. But that isn’t how I come to my conclusions. Not directly anyway. I think the most important thing is that I must have a confirming signal from another source (and better yet 2 or 3 other sources) before I can make a decision I am comfortable with when it comes to price reversals.
For example if you are wondering why I was so cocksure gold was about to decline it’s just because I did my homework and daily check in on metals. I look at the charts for GLD, GDX, GDXJ, Canadian dolllar, USD / Euro pair and scan the indices and commodities. Nothing happens in isolation. Everything is connected.
Then I cross check my ideas against an assortment of charts, count out Elliot Waves and try not to get bogged down too much by Fibbonacci’s. The second most important thing is to try and look at the charts with new eyes every day and avoid the temptation to go at it with a predefined notion of what is about to happen.
I mean you just let the charts tell you what is the truth and stay critical and detached. I avoid using most of the complex indicators most of the time to tell the truth, like moving averages, Bollingers etcetera. Just keep it simple by looking at support and resistance, trend, channels and the popular technical (visual) patterns.
I realize that sounds like a lot of effort; the truth is I can scan through everything mentioned above in just a few minutes and come to a conclusion. That is just part of having an approach to making trading judgements that is maybe repetitive and looks a lot like a random walk in the park to onlookers but it is also fairly rigorous.
The other things I do are actually what I don’t do. For example, I usually begin by not listening to anybody else! I rule out ideas like manipulation. I ignore almost all the news about gold and silver except where the Fed and interest rates are concerned. Last, i disregard the crazy gold camp theories of how German repatriation will lift golr or how Chinese buying is going to drain global supply or why Russian buying is going to get us all back on a gold standard.
That stuff is all noise and I have never seen it make any impact. But I read the stories for fun anyway. So yes, to answer your question, I look in on the hourly, daily, weekly charts constantly. I am getting better using the 5 minute.
At the end of the day my conclusions are surprisingly accurate. Far more often than the averages would imply. That isn’t bragging or anything. It is just the result of taking a methodical, cold approach to gold analysis that seems to work well for me.
Bird,
Thanks for taking the time to answer my question. It was well written and in detail, more then I imagined. Seems we all do the same but some have that talent to do it much easier. As you say let it come to you. There are many professional soccer players in the world yet there are only 2 maybe three that stand out from the rest. They have a god giving talent. This is no different. We all make money and lose money but some make shit load of money :). It always great to here guys like you and Matt and see the different skills you have and work ethic put forth. It maybe a breeze for you to look at all that in a second and come to a conclusion but im sure there are many,many years behind all that. Nothing comes easy. Nice to see you sharing with the community here and thanks for the insight. What I will take away from this is follow the trend.
Keep posting those tips and calls from time to time. Maybe you can post a temporary bottom call if you catch one before me.
cheers
Bird.
I meant cheers
Glen lol
Thanks Glen. I have been in and out of gold for more than Fourty years. Time really flies. I guess after all this time all I know for certain is that there are no fixed patterns that can be counted on with absolute certainty. There are cyclical patterns though and paying attention to them really helps to get you going in the right direction and not get lost in the day to day clutter of newsbits and noise.
Hey Glen,
The 1220-1218 zone was the level of support we had discussed a few different times over the last 2 weeks, and we stated the next stop below 1232 was this support zone. Well it bounced off this zone all afternoon and hovered in a channel between 1218.60 and 1221.60. I’d say to nail another level of support from when things were in the 1270s and 1260s to the tee was another good call.
Are you jumping ship and heading for the 1206-1207 camp ? (just kidding, you guys are probably right, and I may be an idiot for adding to my JNUG shares today. I just saw real support at this level, and I expected we’d see the low on Friday or Tue/Wed of this week. Since it hit the target I was looking for and held, I waded in a little more. It really is time for the bounce if we’re gonna have it, as we are 1/3 of the way into February now.
Shad,
I believe we did our homework and these levels are always charted on ones historical data. Do be frank, know one knows but the bankers themselves and mm’s as to how far they will let it go.
Yes 1220/1217 held all day but 1216 was hit after market. We can have a slightly up day tomorrow and then wham again on friday for the bottom, or today may have been the bottom.
My tummy tells me it’s going to be a hidden pivot number of which many are not focused on. It’s really all a guess now. My number 1207 and his been on my map as we headed down. I nibbled once on friday and layed back. I have remained as patient as one could be. Tuff to do as finger gets trigger happy. There are many many good traders in this profession and all want to get that bargain share price before the pop. I have learned wait,wait and wait one last time as they open that window for 30 minutes to get in and out. Im hoping that window is tomorrow or friday. I may have missed it today if we pop but that’s fine as I have shares from friday. The strategy is lay an egg or two as we drop and lay them heavier as we drop more and more.
My real concern shad/Matt/Doc/Gary/Bird/Lawrence/LPG/stewie/BB/j/etc is when it pops, does it pop for 1,2 ,3 days or 2 weeks? Does it attack 1300? or fail at 1252/1253? or 1275/1280?
Those are my bigger concerns.
Ha! That is good news Glen. I thought you were encouraging me to be Frank from now on. “Do be frank….” : – )
Yes I completely agree with every point you made and concern you brought up. Well said, and it is wait, wait, and wait and see time. Very good point about the “30 minute window.” I have noticed with GDXJ it always seems to be either the first or last 30 minutes where an insane move or a huge reversal takes place, for example. The volumes of shares go through the roof, and the floodgates are open.
All I have is a speculative opinion on the bounce but here goes. Originally I had laid out 3 target zones of support 1250-1240, 1232, and 1220-1218. Gold sailed past the first one like a hot knife through butter. Then, aside from the brief dip to 1228.60 it hovered +/- 1232 (1230-1234) most of Friday. Monday was a muted move up, but it really lacked conviction and channeled sideways all day and after hours. That to me was not a positive sign of bullish energy building, and it may hurt the upside bounce intensity and duration.
Then Pre-market on Tuesday gold was tumbling and it came down and tagged the 1231-1232 number again and bounced back to close higher. I thought that could have been the bottom, but then today Gold made another break lower and did come down to the 1220-1218 zone of support that we had identified. For me it was an area that I remembered with a lot of congestion on the way up, and also this was based off the 1219.30 peak from Jan 6th. It held up pretty good, but you are correct that it did break below it after hours, and now is up above 1222.60, so who knows if this was the bottom? We’ll just have to wait and see.
I feel if we could have only come down to 1257 or something in the 1240s that we really had a chance to take out 1308, 1323, and maybe 1347. I always knew 1382 was a long shot, but I wanted to include it as it is more significant to me that the 1346.80 peak. Regardless, I now feel most of those targets are now off the table on this particular upleg, and I only expect a week or two of upside momentum.
Here are my upside resistance levels.
1) First level of resistance $1244.70 – besides the obvious 1228-1232 level we just had as support on the way down, will be the Feb 10th peak of $1244.70.
2) Second level of resistance is around $1259 – We had the Feb 5th trough at $1259 (and it also touched 1260.80 on an earlier trough that day and bounced from it). Then we had the $1260.10 level on Feb 3rd close. Then we also had the Jan 29th trough of 1258.10. When you look at 1259/1260.80/1260.10/1258.10 ~ $1259.
3) Third level of resistance $1272.85 We had the Feb 4th peak at $1271.90 and the the Feb 2nd peak of $1273.80. $1272.85 seems like a middle of the road target.
4) 4th and last target on the road to $1308 is the Jan 22nd close of $1302.10 – Honestly, if we get that close, the marketplace will try for the $1308 target. I just think it may hit $1302.10 and retreat on the first attempt.
Shad,
Great points you bring up and im in agreement with mostly everything. Im still going to give it a 25% shot at breaking 1308 just because 75% now feel it’s not possible :)..
I gotta run opposite to heard or buffalo..Good pick up on gdx/gdxj.I talked to matt about noticing a trend with gdxj specifically. Down in the pre-market and first 30 minutes and then green all day followed by last half hour take down and into after hours. Total manipulation. These markets are not normal from long time ago. This is also another reason why we must keep open minded to a powerful 50-80 dollar move up on first pop. Then everyone’s tone will change.
I meant to be frank..My eyes are foggy or brain lol.
Mine too Glen. Maybe we should chronicle these adventures as “My Life Behind A Screen” because 90% of us are staring at some kind of screen (computer, phone, tablet, TV, GPS, ovens, ATMs, just a bunch of screens that shape our lives).
Yup i miss the good old days were it was fun without the gadgets. Reflecting now who would of ever thought most things seen in the 80’s in movies have become reality? The jetson’s way of living is becoming more plausible.
The japanese have created dogs and human robots that will scratch your back and fetch me a fiddich lol.. That’s a scoth fiddich 🙂
Shad on another note I wanted to mention my reasoning behind the 25%. It was the year closing price in gold that has me thinking we have the bottom in. We closed 1206 above 2013 close which was 1204.
I’ve made several calculations based on closing open year price and closing year price of gold in every year. We have many things in common with 2008/2009 chart pattern. The only thing that im discontent with is the going into january up then down. In 2009 we went down then up.
Im going to play this rebound as best as possible as this is my trading position not my long term investment. I plan to enter by friday the latest. Im not personally going to leave it in the hands of a long weekend family day here in canada where the markets will be closed. It maybe a gamble as it could always gap down and i could miss some more but i will see. I will ride it to at least the first week of March. In the past, the 15th of march provided a top give or take on two occasions since the bull started in 1999. This stat is based on going up into mid/3rd week of january. So i will pay close attention. If we pass 1347 by then, well the bull is alive 🙂
cheers
This article may be of interest to Rick and others who do the technicals:
‘This is the first time I’ve seen this ‘buy’ signal for gold since 2009’
http://moneyweek.com/gold-price-macd-buy-signal/
I don’t have the experience to comment on it but it is probably worth a 5 minute read.
Excellent Bob. Thank you very much I found that very helpful.
Yes, Bob great article, charts, and signals triggered by the momentum indicators.
Thanks for posting!
Thanks Bob UK.
Beauuuuutiful chart, IMHO.
Best to you and GL to all investing/trading.
LPG
Ditto guys
Thanks Bob – ditto the above. MACD explained for the layman.
http://www.investopedia.com/video/play/moving-average-convergence-divergence-macd/
By the way Bob, that signal fits in very nicely with my 2015 theme for a commodity bottom to arrive. We are going to get a sectoral rotation of assets this year so the more information the better.
We are already seeing the Commercials moving long into commodities sector in advance of the herd so this is something to keep an eye on. But perhaps more importantly, if commodities will again be on the rise that does suggest something else will decline as capital shifts between classes.
Are you watching the VIX chart by the way? It is playing along almost perfectly with my thesis for a drama come Monday. Some guys swear you cannot do technical analysis on the VIX but I think they are dead wrong.
My bet right now…..the VIX breaks down, Greece gets an interim deal to keep it in the Eurozone and stock markets pop Monday morning and break out of their trading range. The USD double tops just shy of 96 and the Euro double bottoms at 1.11 …….so what we see next week is the dollar in decline and the Euro on the rise based on relief that Greece will not default.
Good thoughts Birdman. I tend to agree with the upcoming sector rotation this late spring/summer where commodities bottom as the dollar tops. I think the dollar may actually get above 100 in the summer before topping. I also expect the stock market to rally up into the summer, and then start the topping process as well. It may head into the fall before completely topping though.
On this short term down leg, I am still waiting to see if 1220-1218 holds as support and then expect the short term rally to take place. I don’t see it getting down past 1206 personally, but will admit I’ve been wrong before : – )
Where does that see the loonie in your eyes? douuble bottom? or lowere lows with gold?
The loonie should head up once the dollar tops and reverses, as will the majority of other currencies.
Also, commodities putting in their bottom to the 3 1/2 year bear and rebounding will be a much need change for the Canadian economy.
I am betting the Loonie goes to 77 at a minimum before it is done. That is the 08 / 09 double bottom low.
I could agree with 76-78 for the Loonie Birdman, but I do expect it to come back in the summer when the dollar tops.
Agreed! I did not think of that. In my mind i was focused on dont break 78 as 77 represents a long term inverse head..But a double bottom is well put.
Thanks
Does it make sense?
Makes perfect sense to me.
+1
Thanks Bob one of your best links! Not because its bullish but the crossover on importance.
cheers
+1 and also IMHO the fact that the crossover is starting from a very low point.
Yup…especially that.
Agreed. I prefer buying low rather than high, when a good indicator gets triggered.
+1 Dominic Frisby is a good and knowledgable goldbug.
It remains bullish to me that gold was unable to reach the next significant monthly EMA on its last decline. You can see that the 89 month EMA is again in play today:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&yr=15&mn=3&dy=0&id=p69571327774&a=389211994
Dominic did this hilarious video about bankers and the debt crisis. It is worth watching.
Thanks Bob! Very entertaining! 😉
Very funny and the dancing girls just kept getting better and better. Debt Bomb!
GREAT!
As Cellinti said, they want to take us to WAR……….
J did you pick up ker? What caused your interest in it? I couldn’t find anything out of the normal.
bb………..no …., it came up on kitco’s site, as most percentage move up, last week and this week. …pLUS , I thought Kerr,,,,,was an err ,,and big Al might be going for the gold as to speak and launching out and expanding his domain. You know he bought that silver mine in Nevada, that irish tony dumped on him while in Las Vegas two years ago…. Then after Doc came along, Owl and Doc started taking turns shoveling for fun on their vacations, one way to get a first hand knowledge in the pits… After all , BIG OWL, has many things going on the side…………………………….lol……..slow day active mind….out of the box..j
Darn, I was hopeing you saw something, I was going to say “good one” a double in a couple days is always nice.
Management saw no reason for it to move, must just be people looking for cheap stuff believing a bottom is in for gold.
A small indication there is still money sloshing around.
I think you are right on people looking for cheap………looking for the ten bagger or more………………..It is going to happen, just when……..
I was hoping that someone knew something also, concerning Kerr, if it changes I will let to know………………………………………………….j
I have to say, the stocks I watch are not going lower with this drop.
First time I can say maybe they have stopped dropping, I know a little latter than some around here.
ditto bb..are you suprised?
I have been watching a few,some Im not interested in stopped going down a few days ago, its just the ones I am interested in took a little longer to stop falling.
Tho if gold drops another $20 I think they would come down further.
I just watched a Mike Maloney u tube about “operation chokepoint”. His bank just did an audit on his company to see if he was too risky to do business with. Just one more risk for gold buyers I guess.
Anyone interested in physical might want to watch it, 7 mins.
“America is choking operation chokepoint”
I guess this is how the government will stop sales of gold bullion/coins.
thanks bb……………..
second thought , why does he even need a bank to audit his business, unless he owes them for some loan………….which would go against some of which he has been preaching…………………..like go and owe no man……..
banking, loan , ………..counterparty risk………..gots………I am beginning to wonder if this guy for real………………………………………….j
J, he doesn’t need a bank to audit, its a government move the banks must comply with.
It also covers ammo, firearms,porn whole bunch of stuff.
As far as I am concerned its a MUST KNOW info for anyone owning/buying physical. Especially those that buy online and nit in person, they will know where every once is.
A lot of people have been saying keep it out of the country, the other day I watched Faber saying confiscation is a real risk for gold owners.
Watch the video, its only 7 mins. and your going to want to be aware of this.
I shipped all of mine out almost 5 years ago.
THANKS BB…………………
SURE GLAD I SOLD ALL MY GOLD YESTERDAY………….AT A LOSS, I WILL HAVE A CREDIT NOW………………………………
Geeze matt how much are you holding 🙂
J….here’s another article on chokepoint……
thanks GATOR………………………..
The program has ended bb. The FDIC has backed off its stance. Mike is just using this belatedly as an excuse to pump up sales of bullion and coin. But he did not tell anyone that part did he?
FDIC retreats on Operation Choke Point — Washington Post January 29th
http://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/01/29/fdic-retreats-on-operation-choke-point/
No he didn’t Bird, and how on earth does it pump up sales?
The point of physical is no counterparty risk.
I know your not a Maloney fan, but pump up sales doesn’t make sense, in fact its a reason not to own gold within the states.
I would wonder about the program ending, sounded pretty recent to me.
Just had another thought, could the fdic end it because they finished all the audits?
I won’t bother to go back and look at the video again but he implied you should buy gold now BEFORE it’s too late and the government has closed down coin and bullion dealers. So basically he made a sales pitch based with a fear premise. It works this way….the FDIC is going to run the gold and coin dealers out of business by closing their bank accounts and borrowing capacity and then one fine day there won’t be any way to buy precious metals because the government hates those kind of business….so stock up now.
He might be telling the truth. I respect Mr. Maloney. He has very indepth analysis. I heard Martin Armstrong mentioned that he is afraid of the sensorship in US in an interview with Jim Publava a few weeks back. He said he choose to publish some video in all other countries but not in US.
he said someone will phone you and tell you better not to do it. If you don’t follow, all kind of auditing will come to you.
You might be right Bird, that could very well be his intention.
I take it the other way, anyone buying from him (or those like him) the government knows exactly.
We know the U.S. is a bankrupt police state, we know these kind of governments end up taking their peoples wealth.
As has been discussed many times, “could they put a windfall tax of gold?”
So, they look at all records, and decide to hit everyone on their list with an 80% tax, and they have the list of names addresses # of onces purchased everything.
Big counterparty risk, eliminates the very reason to own it in the first place.
In my opinion, this is a secret the dealers don’t want you to know lol
Did any other dealer say anything? lol.
I just think its something physical owners should be aware of.
Glad I don’t live in the states. But my dealer did start asking for signatures when purchasing a year or so ago.
bb , do you think people just give them the physical. A lot of people did not hand in their gold in 1933. Never heard of anyone arrested.
Even last year, there were a few hundred armed militia in north Dakota stand off against police and I did not hear anything happening to them.
I am happy I am not in US as well.
They could do the same thing FDR did, buy it all, then they could say that anything not sold to the government by a specific date is fine but would be subject to a heavy tax after that date upon selling it. For example
The point is, they know everyone that owns it, everything done electronically is recorded.
Heck, they have TVs that record you in your own home now.
Its a bankrupting police state and they are going to come up with imaginative ways to tax the heck out of people.
One positive thing, some states are looking at “nullify now” again
I think because of the windfall profits from marijuana sales.
The Maloney video just told us they specifically gathered the information on precious metal owners.
Not really that hard to do, there are not that many primary dealers.
IRS calls, hello Mr Smith, we notice you have purchased 10 onces of gold, well we are revaluing Friday to $10000 dollars, windfall tax on gold will be 80%, we would like to make arrangements to see you on Monday to collect our $80,000.
Imagination runs wild, but they could make it beneficial to sell your gold to them, even patriotic if they wanted.
Good News: Operation Choke Point was stopped a few weeks ago.
FROM what I have leaned over several decades.,,,,Maloney, was late to the party, and only within the last few years, even knew what was happening………
Bird………the FDIC is broke, and doesn’t have enough insurance to cover their big mouth……….Besides , GOld will go under ground , like it has in INDIA……get a revelation gold is not going any where but UP…………………lol
Bird……..the govt hates all businesses, except the one’s they control thur campaign contributions……………………..lol
BESIDES THAT ,,,,,,how is your week going……good I hope………………….j
GOLD IS THE ONLY SAVE MONEY !
Operation Choke Point was stopped a few weeks ago.
thanks Jmiller……………
Good interview guys!!Imo a greece exit will strengthen the usd and weaken the commodities.
Corleone,
I would disagree! It would cause turmoil as many more european countries would rather default themselves then have to pony back up. Defaults will start and it will trigger big money loss across the board. Money will flee to dollar and gold imo. Safe haven. Turmoil=safehaven
Defaults=safehaven
Even marty the great has spoken about this numerous times.
glendfish as long as the usd remains strong money will flow into us long term treasuries not pms(10 and 30 yr).The chances for gold are a u.s. default or when the usd loses its reserve currency status.We are in a deflationary era like the 1930s not inflationary.Remember glen that gold yields nothing.Always keep that in mind.Traders put their mouth were the money is.
Don, always keep in mind that gold does well when real rates are negative. Since the economy peaked 15 years ago, gold has tripled vs 30 year US bonds and that is AFTER the current 40% cyclical decline (which is very long in the tooth).
http://stockcharts.com/h-sc/ui?s=$GOLD:$USB&p=M&yr=15&mn=11&dy=30&id=p59835610626&a=371809762
Those who switched from gold to bonds in 2011 made about 4.5 times as much as the US 30 year minus the yield.
Question: If your net worth doubled since 2001, as measured by any of the major national currencies, are you twice as wealthy?
Matthew in trading you have to be as dynamic as possible but the principles remain the same.
Don,
The dollar is going to reverse at some point. When it does let’s see if your opinion changes. Ten year is yielding kaka..Poopoo..Its in a bear and its going lower again. Rick talked about this.
You buy bargains and get in at low prices not over inflated equities/housing here in canada/dollar etc.. You need to be on the other side in the next 5-10 years.
Shad the world is gonna get stuck into deflation for the next 5years imo.Dont bet that the final bottom in commodities is around the corner.The turmoil in europe has just began.The worst is yet to come.Piigs are insolvent.Many european banks are up to their ears in derivatives tied to piigs debt.Besides all this the drop in oil will put many emerging countries into stagnation.If oil continues to droop then texas could easily be the kindle of the next inferno.many oil fracking companies are on the brink of bancruptcy.They are only viable and profitable on the long run only if oil stays above $80.They break even at $55.Figure out what they will be doing at current wti price.They are already firing people.Other countriess like russia,venezuela,iran and others are in the same situation of texas but on a large scale.Things are not shaping up well for the worlds economy and the way I look at them they are all deflationary.
Well I definitely agree with you that there will be some carnage in the oil space and oil service space, and we have not see the worst of it yet. However, I feel that commodities 3 1/2 year bear will be completing itself soon. I can also see an environment where oil falls one more time to $41-$38 by this late spring and then starts trending up into the 50’s and maybe 60’s into the Aug/Sept period. In this environment oil companies and the banks that financed many projects will be in hot water, but I think that this will contribute to the topping of the stock market around the same time.
As for other commodities like food, fertilizer, select base metals, urananium, Platinum, Palladium, and Gold/Silver – I see those turning up for the second half of this year. I don’t think anything will skyrocket until 2016, but I think we’ll see the dynamics of the market we have been in for a few years reverse itself.
When people flee the stock market (as oil stocks and financials get pressured), then a certain percentage of hedge funds and institutional investors will seek real value in hard assets and the commodity space will be seen as weak and ready for some new life. This is just my outlook Don, but I do think the poop is about to hit the fan in Europe, and this will add to the strength of PMs in particular.
Time will tell shad.I am still of the belief that oil will ultimately hit the $10 to $20 and gold $250-$400 by 2017.The longer they keep inflating this speculative bubble in stock market the steeper they will go down when it blew off and the greater the soverign debt the greater the possibility of defaults.Austerity measure serve to incubate the serpent eggs i.e. the far right and nationalist/fascist parties and if these get into power the consequencies are obvious.Huge turmoil,chaos,civil unrest and ultimately the disestablishment of the eu.
Wow, now those are some low targets for oil and gold Don. I definitely think we are going to have plenty of global turmoil, chaos, and civil unrest as you mention, but can’t see either of those assets falling that low in 2017. I’ll stick my neck out and say I believe we have a chance at taking out the old 2011 highs of $1900 gold and $49 Silver in 2017. As for oil in 2 1/2 years, I think we’ll be back in the $70-$90 range at that point. Like you said, only time will tell.
Thanks for you thoughts Don. Much appreciated.
Since you are talking about long term, I just let you know that nobody can produce the commodity at that price. I work in Calgary, a lot of my friends have been laid off. All projects have been halted. Most drilling has stopped if not all. It is 3 million barrels a day off line by 2017.
Yes, cost of production is the ultimate mean that things return to. Sometimes mines and oil producers operate at a loss for a small window of time 1-3 years, but only if their cost of production is at least close to the spot price. Those prices would turn the lights out on the entire industry.
The game is not over..There going to print the biggest stimulus you will have seen in your life. Marks these words. The heroin will be mind blowing.
Shock and awe. No doubt about it.
Nothing on markets or oil?
Well I’m glad you covered it with Chris and Gary, thanks.
PPl read this carefully and tell me if I am right or wrong.Put a monthly gold chart and overlay it with eur/usd chart.Notice that gold started correcting on august 2011 soon after the smart traders realized that the usd is gonna appreciate in the coming months and years.As soon as the traders realized that the move up in eur/usd from june 2010 to may 2011 was not an impulse move up but a corrective move and that usd has turned bullish they dumped their positions in pms.It is crystal clear.This proofs that the stronger the usd gets the weaker the pms become.
Don, then why is it that gold is still higher than it was at the beginning of 2014 even though the dollar is up 18%?
Is the dollar really up or are it’s derivative counterparts down?
the usd is strong relative to other currencies.The usd is the prettiest baby in the nursery as al says.The u.s. is undergoing a deflationary period atm but it is being cancelled out by the zirp.Now coming to your question;dollar and gold dont move in perfect synchronization.Atm the usd is correcting and gold is getting higher.Traders are questioning if the usd has hit the bottom or not.As soon as they realize that the trend in usd has not changed they will do like they did in august of 2011.Matthew prior to the august 2011 drop in gold eur/usd has undergone a sever correction from july 2008 to june 2010 and still gold has gone up.The reason why is that traders took that just as a correction in a bull trend.Infact after that correction has completed eur/usd has continued its way up till may 2011 and gold was moved in tandem.It was on august 2011 that traders realized that eur/usd has entered a neutral to bearish trend and they opted out of gold.Traders test the water.Nobody has a crystal.Eur/usd was presumed innocent until proven guilty.Matthew if you draw a trendline on the eur/usd monthly chart from jun 2010 to jan 2011 you will notice that the moment it was broken gold headed down.
Thanks for replying. True, trends are trends until they’re not, but gold does look a lot less risky now than gold in my opinion. I strongly believe that gold will resume its uptrend vs the dollar since there is no politically acceptable alternative to weakening the currency in order to manage the debt.
Matthew bear this in mind.In a deflationary era everything goes down with the exception of us treasuries/german bunds.My advice is to stay in cash and wait for the storm to pass.Billionaires will turn into millionaires and many assets from houses to cars will be on fire-sale.Why buy now when you can buy later at a cheaper price and one last thing matthew and dont forget this.EVERY CORRECTION COMES IN 3 WAVES.Thus housing has to incur one last correction.This time there will be no bailouts and prices of median houses are gonna drop dramatically.Never take my words as an investment advice.It is just food for thought matthew.Hope that I have been of some help.Take care buddy whatever your position.
Matthew.. I think you must have meant..
“but gold does look a lot less risky now than ***USD*** in my opinion”..?
Correct genesys, thanks! I stand by that, btw. We’ve had net deflation in real terms since 2000 and gold is up almost five-fold in nominal terms. Currency debasement is the reason (starting with deficit spending on war while cutting taxes. It doesn’t boost creditor confidence when you spend more AND cut your income.)
The big counter trend moves in stocks and gold are near their respective ends, in my opinion. The dollar today is nothing but an IOU (more debt) that will be inflated away (inflation of supply ULTIMATELY equals deflation of purchasing power).
Gold’s secular uptrend is alive and well:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&yr=14&mn=0&dy=0&id=p76980710921&a=367847899
Don, I agree with you about housing having more downside.
ditto on the downside for housing…………..
It will be interesting to see who will step in to help Greece when Greece steps out of the European Union–and on the out, does that forward momentum move them out of NATO to be embraced by Russia or China or both? Bloomberg recently reported on Putin and Egypt’s military dictatorship exchanging bear hugs. This is what happens to a super power that pissed out it’s blood, treasure and credibility in Iraq under the Bush Dynasty. It’s a whole lot easier to start a war that end it, much less win it–even if you have nothing to show for it but massive debt, dead soldiers and permanently disabled vets who will require life long care.
BTW, I also read that Russia is negotiating stronger ties with Turkey–another NATO ally. So, one begins to wonder where Southern Europe and North Africa will align themselves as all these ‘proxy wars’ gel into one massive regional conflicts. Will they look to the East or West knowing what they know about western banks, more specifically Wall Street “banks” and the IMF.
birdman, if I were you Id return to gardening.
Im not sure why youre here..
I think Als offer of 250,000 was generous.
agatha
A little rude.. Dont you think!!
Don & Glen fid
is gold a commodity….?
Who holds the most UD debt……..
Ann – no rudeness intended. His superiority gets a bit much among civilized folks.
He stated the site was stressing him .. And that he could return to gardening..
So why is he here if it stresses him..?? It’s a good show hardly stressful. On the contrary.
It’s a beacon. Cheers.
You don’t have to read my posts Agatha. My record for catching trends and turns has been pretty good overall. Not perfect (because nobody is perfect) but I get it better than most. Maybe you could learn something if you kept an open mind.
Just sharing.
1. Commodities will continue to be weak and the ones that aren’t down too much yet (like copper), in our opinion, are likely to fall.
2. The US economy will continue to surprise to the upside in 2015.
3. A European crisis is looming as many problems still remain.
4. A housing recovery in the US should continue in 2015.
5. The US dollar will get even stronger in 2015.
We have been making this argument for the past three years now and our thesis remains the same. We saw a drastic increase in the
supply of commodities globally after many years of massive investment when commodity prices were high. Today, lower demand growth
coupled with buoyant supply will continue to pressure commodity prices. Economics 101 here folks, what happens when there is too
much supply and not enough demand??….price falls.
• Oil:We predict oil will stay below $70 and average no more than $60 for 2015: We would likely short more on any bounce.
• Copper:We expect copper to go below $2.50 / pound in 2015 and think that it will stay there long term. We started shorting copper
related equities and would continue to short more on any bounce.
• Iron Ore:We don’t expect any improvement in the price of iron ore. We would potentially short on any bounce.
Despite seeing a material increase in oil and gas production, the US remains a large net importer of oil and will benefit substantially from
the recent fall in the oil price. This price drop is a huge win for most States. We also think that the US deficit will continue to fall. The risk
is investors start to worry about interest rate increases despite low inflation, which could increase the volatility of US stock markets.
A lower gasoline price could help the European economy in 2015, but key fundamental issues have not been resolved. We have seen a
wave of anti-austerity & anti-European Union sentiment spread across many countries in Europe. One recent example is the upcoming
election in Greece. The Syriza party (led by Alexis Tsipras) wants to stop paying the debt Greece owes as well as renegotiate its debt
terms with the Europeans (including the European Central Bank). Furthermore, despite the fragile situation in Greece, Mr. Tsipras wants
to increase salaries and pensions of civil servants as well as add more government employees. In our opinion, if the Syriza party wins a
majority in Greece, European Crises 2.0 could start in just a few weeks. Even if Tsipras doesn’t win, we think that the outlook for Europe
remains bleak for many years to come.
The US housing recovery should continue as new residential construction starts still remain below the number of family formations. Toll
Brothers, a large US homebuilder, recently stated in their Q4 press release that “despite the rebound in the last 2 years, home sales and
starts are still nowhere near normal levels. This was the sixth consecutive year that starts failed to hit the one million mark, which was
unprecedented before 2008 in records dating back to 1959. We agree with them and believe the US housing recovery will go north of
one million houses per year. Furthermore, the US job recovery seems to be picking up steam as is the US manufacturing sector, trends
which bode well for US housing.
This will also help keep inflation low (along with a lower oil price) in the US despite a stronger economy.
6. Interest rates are going to stay low despite markets experiencing interest rate scares.
7. A financial crisis in some emerging markets may occur in 2015.
8. US stock market volatility in 2015.
9. China could devalue their currency in 2015.
We expect the US 5 year rate to stay below 2% and the US 10 year to stay below 3%.
We already started seeing many problems in Brazil, Venezuela, Chili, Peru, Russia, China and Argentina just last year and we wouldn’t
be surprised if more cracks start to show in 2015. A rising US dollar is bad for emerging market countries as many governments and
corporations have US dollar debt. According to BIS, emerging market borrowers have about $2 trillion dollars of US debt and we’ve
heard of even larger estimates out there. The huge carry trade and money in-flows into emerging markets that once existed are starting
to reverse. It’s likely, in our opinion that this outflow of money will end up causing money flow problems in emerging markets which will
then trigger a crisis at some point.
Although we believe that US stock markets will continue to lead, we expect markets to be way more volatile in 2015. That being said,
we intend to take advantage of the multi ups and downs that we think we will see. Considering that approximately 60% of the S&P 500
earnings went for share buybacks in 2014, according to a report we read, and that the Japanese are going to be buying billions of US
equities as part of their plan, it’s hard to imagine valuations getting much lower. Also, the flow of ETFs seems unstoppable and a good
portion of ETF money goes into S&P stocks.
China is not growing at 7% like the media states so often.
Housing is not coming back……………for a long time……..maybe 20 years……
School loans vs housing mortgages……………both can not be serviced at the same time.
Bill. How about putting that into one tenth of the space
Thank you
Bill needs to express himself, he is new, and likes to cover all issues,,,,,lol
This is from a manager I highly doubt ANYONE here can hold a candle too. He’s managed 150 to 300 mil never had a losing year in 15. Cashed out completely before the big one. 10-30% annually. Go ahead laugh it up. I know him well.
Bill…..what is the guru’s name……………..thanks……………………..j
BIG OWL, might want him for an interview…………….just saying………………j
I read all the forecasts Bill and appreciate the perspective. Thanks for posting it.
RE Agatha Gisty says:
“Bill. How about putting that into one tenth of the space”
I didn’t write it just copied.
I was surprised as Hell when he dumped all his resource stocks in 2011. He made me money every year and Hes being conservative these days. When we spoke he was unconcerned of the debt in the US…and the money printing for a few solid reasons..You wont ever get an interview…Took me a week to get a call up with him…Humble man that beats all…The only guy Id lay down a lot of money for.
Wake me up when money velocity (MZMV) picks up.
Ok RIP VAN WINKLE………………..
Pulling wire get back to ya
THEY AlREADY KNOW SOMETHING IN EUROPE………………..that’s why they are dropping the GOLD price !!!!