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Do the high consumer confidence number mean anything for the markets?

May 1, 2015

Gary joins us to chat about the consumer confidence numbers that were released today as well as the drop in gold. Consumer confidence rose to the second highest reported amount in 8 years! The markets are reflecting this confidence number by taking back all full drop from yesterday.

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Discussion
82 Comments
    May 01, 2015 01:16 AM

    Good interview guys. Gary I agree that today was just a little snap-back from temporary oversold conditions in the general markets, but we may head a little lower next week. Next weeks Job report will be interesting as the market is finally paying more attention to the news and data points on the health of the economy….especially after the disappointing GDP numbers.

      May 01, 2015 01:28 AM

      Goldcorp CEO Answers Tough Analyst Questions During Earnings Call Q&A

      http://www.kitco.com/news/2015-04-30/Goldcorp-Dips-To-Q1-Loss-Production-Sales-Rise.html

        May 01, 2015 01:37 AM

        Eldorado Reports 2015 First Quarter Financial and Operational Results

        http://www.juniorminingnetwork.com/junior-miner-news/press-releases/1175-tsx/eld/6443-eldorado-reports-2015-first-quarter-financial-and-operational-results.html#.VUOqo_ldV8E

        In these posts today from Goldcorp, Eldorado Gold, and Agnico Eagle, it shows that the majors are down year over year, but they all announced the improvements to their operations from 2014 and Q1 2015, and how the trend moving forward will be greatly improved.

        This tells me once again that the smaller producers and mid-tiers have already corrected their operations and are far ahead of the majors, but that the whole sector has had it’s wake up call and maybe there will be more free cash flow on balance sheets when PM prices to improve again. (instead of growth for the sake of growth and over-paying for new projects at the peak in prices)

          May 01, 2015 01:42 PM

          I am also still waiting to see more joint-ventures and mergers announced to signal that these companies are going shopping for value. More importantly I have been trying to acquire the best Jr explorers and Jr & Mid-tier miners that may be targets for these JVs and take-overs.

    May 01, 2015 01:18 AM

    Sounding better each day, Big Al! Wishing you the best in your continuing recovery!

    May 01, 2015 01:29 AM
      May 01, 2015 01:50 AM

      Break Out Set Up
      by Avi Gilburt, ElliottWaveTrader.net
      Tuesday April 28th 2015

      https://www.elliottwavetrader.net/marketupdate/Break-Out-Set-Up-201504261844876.html

        May 01, 2015 01:52 AM

        Silver & Gold Pullback Should be Completing —- Avi Gilburt (last weekend)

        http://www.kitco.com/ind/Gilburt/2015-04-29-Silver-Gold-Pullback-Should-be-Completing.html

          May 01, 2015 01:59 AM

          In this article, Avi notes that Gold and USD are not moving inversely, but together
          I did a little research and charting: It seems that the correlation coefficient for GOLD:USD is approximately (negative) 0.6 over that past 15 years. Although anything greater than 0.5 (positive or negative) is considered a strong relationship, GOLD and USD do not, by any means, always move inversely. Not even mostly …

            May 01, 2015 01:42 PM

            That Avi Gilburt article was posted on the 28th and the pattern Avi had in mind has already been invalidated as GLD fell to pennies over 112.00 today. In fact, the H&S pattern I have identified weeks back has only become clearer on the GLD chart and gold now threatens to fall all the way back to long term support at 110.00

            That’s two dollars and change and I give it a high probability of coming through.

            What I believe will happen is that we get a bounce right off support and the bulls will aggressively buy that bounce and pile back into the trade again. Their buying should be enough to set off a short covering rally and recharge the trade before sending gold back down to new lows.

            May 01, 2015 01:48 PM

            Yes, that is an interesting point Brian, and the correlation is still there, and the marketplace often trades using that assumption (an even I have based trades in Gold based on where the dollar was moving on the charts), but there as actually no real correlation if half the time they move in tandem.

            Birdman, yes the Avi article was a few days old and the pattern hadn’t worked exactly as forecast, but I was interested to hear how people feel it may work out. I tend to agree with you that it will likely bounce off support next week, and then maybe get a bounce that gets traders a little more bullish, but it will be a head-fake.

            May 01, 2015 01:51 PM

            Thanks for posting it btw. I had not looked in on Avi in awhile but it was time well spent.

    bb
    May 01, 2015 01:30 AM

    I think Gary has good ideas, (not investment advice?)
    I have been saying all along I expect China to increase buying about $1000 (if we get there) Ricks $800 could be the “overshoot”
    This could be a real opportunity coming up.
    I think Gary has a good idea to forget the market now and prepare for the lows.
    Heck, if gold dropped below $800 the miners all go broke anyway so it wouldn’t matter where you bought them.

    bb
    May 01, 2015 01:37 AM

    Just thinking, How many tons is 1 Trillion in gold?
    I read Indias gold demand dropped off a bit, west getting low on gold (if ya believe that stuff I guess) but I wonder if that Indian gold isn’t being set up to sell to China?
    That could really reduce upside pressure for awhile.
    Even if China increased buying at about $1000.
    Does someone know how many tons gold is $1 Trillion?

      May 01, 2015 01:39 AM

      I doubt India would be selling gold en masse to China for historical reasons.

      LPG
      May 01, 2015 01:47 AM

      According to my calculations, 26k MT using $1200/Oz.
      LPG

        bb
        May 01, 2015 01:14 AM

        LPG, 26 thousand tons?’ That much?
        Easily enough to reduce upward preassure.
        Bob UK, I don’t think it matters, its still the same bank.
        India is playing both sides, east and west and Russia right now.
        They state they want the cash to help their economy, balony of course, they could mint it to coins and spend it that way.
        Regardless, I think they will sell to China because its the same bank.
        We may not see a real division until the BRIC bank and aiib are fully operational.

          bb
          May 01, 2015 01:17 AM

          Just occurred, they are both BRICs, they will sell to them.

            bb
            May 01, 2015 01:22 AM

            26 thousand tons? that cant be right, what have I got wrong? 26k tons is enough to take gold to $400 easily.

            LPG
            May 01, 2015 01:29 AM

            Maybe my calculations are not right, but this is what I come up to using $1200/oz.
            Now, if you use $5000/oz for the price of gold, then it’s equivalent to 6.2k MT.
            Maybe you feel better this way 🙂
            LPG

            bb
            May 01, 2015 01:43 AM

            LPG, for my thinking its the number of tons that matters more than price.
            Check how much China/Russia buys, its a couple hundred a month?
            Even 6 thousand tons could be used to put the price anywhere the “cabal” intended.

            May 01, 2015 01:49 PM

            Macquarie Research had estimated India’s total gold value at 950 billion back in 2011 when gold was trading around 1600 dollars. At that time it was estimated Indian families held 18,000 tonnes but that number is now approaching 21,000.

            So lets just say the country has close to a trillion bucks of the metal or roughly 12% of all the gold ever mined. The Indian government has a target of convincing their people to hand over 10% of that amount for melt and sales. In exchange they will offer interest for deposits.

            Pretty clever if you ask me. But indeed bb….who will they sell it too?!!!

            bb
            May 01, 2015 01:57 PM

            That # (aprox 20k tons) is the people of Indias holdongs.
            What their talking about selling is from the temples.
            The estimate I read they figured they had 1 trillion worth.

            I guess there would be complications if they just minted it into coins.
            Selling is an indication to me that the banks have influence.

            May 01, 2015 01:17 PM

            You got me there. You mean there is almost double the amount of gold I thought they had? Man, that is one mother of a stack!

            bb
            May 01, 2015 01:27 PM

            Well, its possible the author was “out to lunch”. But I read other articles about how much there was in the temples…lots.
            The issue was (a the time) was wether the people would allow “religious” gold to be sold, but I guess that was resolved.
            With bank influence, as Greenspan? said, their error was not keeping the price of gold controlled when it went to 1900?
            If that gold hits the market, it would supply everything China,Russia Krygistan and every other demand on the planet for how many years?
            Maybe that is what Dent was looking at when he said $400?

            bb
            May 01, 2015 01:34 PM

            Heck, maybe that’s the gold Hudas talks about.
            Records were not accurate of mining gold 2000 years ago, and I think it prudent not to tell people like Alexander the great or Kengas Kahn there is tons of gold stashed.

            Its centuries of accumulation, the knowledge of it was kept from the British for example, and you know how wll kept secrets of ancient manuscipts are.

            bb
            May 01, 2015 01:41 PM

            Nearly forgot too.
            Sprott and others repeatedly said thy never had a clue as to where the metal was coming from.
            And, gold just part of the hoards, rumours have circulated about gems large enough to make the queen of englands eyes “bug out”

            bb
            May 01, 2015 01:44 PM

            Wouldn’t change anything as far as trading markets are concerned of course, but it would sure add weight to the short gold argument.

            bb
            May 01, 2015 01:49 PM

            There could be a lot more gold on this planet than we are led to believe.
            So much actually, ya gotta wonder if the “philosophers stone” really was discovered.
            Well, ya never know. lol

            May 01, 2015 01:51 PM

            Interesting thought, so maybe the gold is coming from India even as we are all being distracted by the amount of incoming gold purportedly being bought up by the adoring public. In fact, we do not know who has been buying all the gold headed to india. Would it not be hilarious if the West was behind some of the Indian gold purchases and the surplus was being redirected elsewhere?

            In the meantime, does anybody have a total on how much gold the BRICS nations control collectively? It must be at least 35,000 tonnes or more. Enough to measure up to all the Western Central Banks in volumes.

            Which means if there were to ever be a gold confiscation it would happen in the emerging world (BRIC’s) where governments seem quite intent on putting that private gold into public and government vaults or finding a way to add it to official reserves.

            Its a crazy world bb. Anything seems possible lately. Even a grab of Buddhas hoard.

            bb
            May 01, 2015 01:05 PM

            You know that’s true Bird, a lot of refined gold in Switzerland went to the uae Saudi Arabia, it was apperantly being smuggled from there, why not smuggle it back to the west? That Indian gold would need refining.
            And the U.S. navy is now escorting ships over there. hmmm

            bb
            May 01, 2015 01:13 PM

            Eventually confidence in currencies will have to be propped up.
            I cant see the world trashing a nation with enough nuclear bombs to end everything.
            All these calculations as to what gold should be priced at using m1,m2.m3 unfunded liabilities etc gold going to $50k per once, well bread would be $100 a loaf.
            But double or triple the worlds supply of gold and they could back it, restore confidence without bread going to $100 a loaf and the U.S. would stay on even terms with China etc.
            My tin foil hat is tingling.

      May 01, 2015 01:54 AM

      I have that number tattooed inside my left ear; the only way to see it is to cut my ear off.

      signed: Kutmeernoff in Moscow

        May 01, 2015 01:37 AM

        Get a mirror first, and remember to read the info backwards.
        signed: Mirroro from Earyopia

    May 01, 2015 01:18 AM

    Early this morning (on Doc’s April 30 thread) I posted that it was time to get your eyes pasted on Natural Gas. At that dark hour of the morning it was 36 cents lower than now. Anyone looking at the chart currently can see we just had a very nice move upward this morning. Man, my timing is good lately when it comes to picking off the moves before they come. I can only pray that good luck streak lasts.

    bb
    May 01, 2015 01:23 AM

    Its not luck Bird, the stars have merely aligned to your charts.

    bb
    May 01, 2015 01:24 AM

    Cycles Bird, as good as they are now, they will be just as “off” in time.

    bb
    May 01, 2015 01:26 AM

    But for now, you seem to be right on, make some hay buddy.

      May 01, 2015 01:42 AM

      Thanks bb. I am crossing my fingers. Kind of puzzled why things have been working out so well almost every day lately. I think maybe its because I just take a more relaxed view of the markets and have stopped stressing over all the conspiracy stuff and panic-driven worries that seem to keep our minds busy day in and day out.

      Or maybe its just because I am booze-free for six months now!

        bb
        May 01, 2015 01:48 AM

        Nope Bird, Ive been watching, ever notice different guys are right for awhile?
        Remember how right on Doc was when he was just posting?
        I think different methods work at different times. No idea why, just seems that way to me. So if yours is working now, trust it until it doesn’t work so well.
        Just my thinking.

          bb
          May 01, 2015 01:55 AM

          You’ve been hitting it out of the park recently Bird, Ive noticed the improvement.
          Your fireing on all cylinders.
          I can guarantee you will have to adjust something in time, but now?
          Push the money in the pot.
          Not all of it of course, lol

            May 01, 2015 01:54 PM

            I see The Tag Team of bb and bird are alive and well on tis site, Bird calls the nonsense and bb backs him up!

            May 01, 2015 01:57 PM

            bb says, ” Yes Bird you are so wonderful!”

            May 01, 2015 01:53 PM

            That’s because bb is an all round great guy, DT. And he has a great sense of humour too (unlike you).

            May 01, 2015 01:03 PM

            I think DT is kind of funny…….but, I have no business in this tug of war. 🙂

            May 01, 2015 01:03 PM

            All we know about DT for sure is he sure holds a grudge a long time. Tough break for him.

          May 01, 2015 01:55 AM

          I agree BB, and don’t think having a drink has anything to do with charting, unless someone is drunk out of the mind and placing trade orders = not likely.

          Certain systems and ways of doing TA work over time, but have periods where the market actions defy their system (ie MACD crosses, Fib retracement levels and Elliot Wave theory, trendlines, cycle theory, japanese candlesticks, etc….

          Birdman you have a good sense of the macro picture, and picked the correct direction in the US dollar and Silver/Gold lately, and for that you get a gold star. As for Natural Gas I don’t follow it as closely as oil, uranium, and solar in the energy sector.

            May 01, 2015 01:00 AM

            Thanks Shad,….guess I’ll hug the lucky rabbits foot awhile longer.

          May 01, 2015 01:59 AM

          That’s a great point bb. You know, like everything else it is probably just a cycle. Start of the year I was struggling for example and could not seem to get traction with any of my ideas.

          What goes up must come down. Guess it applies to everything.

    May 01, 2015 01:31 AM

    I added some more oil XOP very close to the bottom today. This etf is the easiest one to make money on as it is volatile within a range.

    bb
    May 01, 2015 01:40 AM

    Paul, is that Canadian Overseas Petroleum Limited?

      May 01, 2015 01:52 AM

      It is an etf called XOP (SPDR brand). Holds maybe a 100 oil & gas exploration companies I think. I have at least a 90% success rate with this. Just got a nice $1+ gain already today and could have taken nice profits yesterday but I am worried about the breakout above $60 for oil which could cause a major breakout to $58 to 60 for this etf.

        May 01, 2015 01:11 PM

        Just looking at the hourly chart Paul and it looks to me like a pullback is in the cards for WTI early next week….and XOP seems to confirm that.

    May 01, 2015 01:55 AM

    The 30 year is getting smoked! YEAH BABY!!!!

      May 01, 2015 01:59 AM

      It is and I’m glad I sold my position in TLT in March. I almost got back in when things dipped in April, but with dollar weakness, and bond madness, I decided to wait. I’ll probably take up a new position in TLT in May if things deteriorate a little further after next Fridays job report.

      I know you expect a continual decline, but I am expecting a turn-around in a week or two.

        May 01, 2015 01:13 AM

        Nothing goes straight down of course. So I agree with you there. The 30 year dropping is part of my overall thesis for coming rate hikes and its decline fits hand and glove with the dollar also being in decline.

        That lousy GDP report yesterday from the Fed sure worked nicely to deflate the dollar and break it below .95. And that in conjunction with a market that seems to be accepting rate hikes are coming has seen equities flatten out, bonds deflate and a growing realization develop that as the dollar declines we will indeed get inflation rising as energy prices recover and creep back up.

        All of these are essential components that must come together if the Federal Reserve will be able to get its first long awaited rate hike in before year end.

        In other words, the dollar must be in decline, inflation must become a tangible threat (expectations) and some froth will have to be blown off US equity markets as a means to send capital back to Europe and to the EM.s

        There is a Yin and Yang to everything and to my mind it is no mere coincidence that Chinese markets have taken off like a rocket along with Russia and others. Those are all opportunities right now and offer an opportunity to evade a domestic equities correction.

        For me, it is long EM’s, oil and energy stocks..short dollars, the 30 year and US markets. That’s my basic theory anyway. So we will see how it all plays out.

      bb
      May 01, 2015 01:59 AM

      There you go Bird, its like you cant miss. Unreal actually.
      Don’t let it go to your head, Ive seen it before. lol
      And it wont last either, take advantage while you got it.

        May 01, 2015 01:14 AM

        Sorry bb…but God made me an overconfident SOB!

          bb
          May 01, 2015 01:48 AM

          lol, just keep calling those drops in gold, works great for me.

    bb
    May 01, 2015 01:56 AM

    I guess Ive found the wrong one, the xop that comes up for me is 8.5 cents.

      May 01, 2015 01:12 PM
        bb
        May 01, 2015 01:44 PM

        thx Bird, but I only trade the Canadian market.
        the xop in Canada is 8.5 cents Canadian Overseas Petroleum Limited
        Has to do with taxes, if I stay on Canadian markets I don’t pay taxes, if I traded on the U.S. I would have to pay American taxes as well as Canadian.
        Last thing I want is to deal with is the American government.

        Maybe talk them into listing in Canada, I am envious of all the options the Americans have.
        Created during the time of capitalism I would imagine.

          May 01, 2015 01:05 PM

          I never worry about it bb. That’s what accountants are for. I just figure what the hell..if I make money then I can happily pay the tax and move on.

            bb
            May 01, 2015 01:29 PM

            I understand Bird, I just don’t pay any, no issues. lol I prefer it that way.
            At least not on market profits.
            Actually, I cant write off a loss either, so, there is a cost to everything I guess.

    May 01, 2015 01:01 AM

    A big move in Intel today. I had a large position that I panicked out of yesterday and bought half of it back today just in time. It is getting ready for a breakout above the 200 day in a day or two.

    Tom
    May 01, 2015 01:16 AM

    When in doubt on how to make money just short the metals and miners to alleviate that doubt.

      May 01, 2015 01:06 PM

      I am shot on gold as you type Homey.

    May 01, 2015 01:05 PM

    Typical bla Friday on the markets.

    May 01, 2015 01:11 PM

    SPX Weekly Bearish engulfing candle CANCELLED by Janet.

    May 01, 2015 01:30 PM

    Added some twitter near the bottom as it has been oversold to an extreme level. A high risk stock.

    May 01, 2015 01:58 PM

    Last week, there were a record 3.3 million new A-Share trading accounts opened in China bringing the total of eligible investor broker accounts to almost 200 million. We will see in a day or two how many new accounts were opened this past week but it is expected to be another record.

    But how far can this go on?

    Well I wondered that aloud and thought I might dig up a few answers. What I found was that there are 794 million Chinese in the 25 to 64 year age group and that 85% of those people were now considered to be part of the mass middle income group or higher.

    That means they have annual incomes that begin at the lowest range of 60,000 Renminbi per year (about 9,000 USD in the 2013 study by McKinsey) and rise from there.

    In other words, there are as many as 675 million citizens that might theoretically qualify with sufficient income to open an account and try their hand at investing in the explosive Shanghai or HK exchanges. It’s pretty unlikely everyone would sign up though and so we should expect just a fraction of all those people to start exercising their stock buying muscles.

    But what fraction would that be? And how many more may yet join the party?

    Well, if it really is an investment mania there,(D’UH), then we should readily anticipate tens of millions of more entrants from the remaining 475 million souls who do not yet have accounts.

    Is another 100 million people really out of the question? How about 200 million? And maybe we have only seen half the participants sign up who may yet risk it all on Red before the inevitable crash and burn. (we all know that’s coming).

    Kind of mind blowing isn’t it?

      bb
      May 01, 2015 01:11 PM

      It is mindblowing Bird, if I might add?
      When I played cards I found Asians, LOVE to gamble, BIG TIME.
      Its possible you are underestimating the # of people interested.
      Except,maybe take into account the gambling was dominated by men. Very few women, they would watch.
      Lawrence might be able to add something there.
      But it might be wise to open a trading account on a Chinese market, just for what a card player would call “the action”.

        May 01, 2015 01:27 PM

        You said it bb. Most of the Chinese I knew back in Vancouver LOVED to gamble. Those guys were really fearless. You are right that I could be underestimating the numbers. But then again, 337 million stock investors would be ALL the eligible males so we might already be getting close to topping out on the rate of expansion of new broker accounts. The speed this is happening at just confirms my belief they crash it over there before the year is out. I guess we will find out soon enough if the Chinese act in herds the same as folks in the West.

          bb
          May 01, 2015 01:31 PM

          Of course they do, people are people.
          Not sure things will crash there tho.
          But, how would I know?

        May 01, 2015 01:37 PM

        How about this:

        There are exactly 21 weeks between today and the Shemitah which arrives on September 25, 2015 so that means they could create 69 million new accounts between here and there at the current rate.

        That gets us to a 40% participation rate and actually, it makes perfect sense to me…..and then BOOM, the whole damn house comes down in a dusty storm cloud just like building 7.

        I could laugh but its actually kind of depressing…………… Because its likely. 🙁

    bb
    May 01, 2015 01:43 PM

    Im gonna bet against you on this one Bird.
    My thinking, the Chinese are jut starting a qe lite (in comparison)
    They intend to focus manufacturing on domestic markets.
    And, they are going to build those rail lines, from Bejing to Moscow (originally planned to go to Germany) They still could.
    Also, they are going to build one to Arabia, thru Pakistan.
    That’s a lot of manufacturing rail ties etc.
    A lot of labour, building them and manufacturing the parts of it.
    Meaning, their economy is going to be based more on production, the value of their companies will be more about profits as opposed to the markets going up due to printed money.
    No crash, corrections maybe but those are normal in any market.

      May 01, 2015 01:23 PM

      True enough. They are busy building railways, airports, docks and highways all over Africa as we speak. Its amazing how much money they are pouring into the continent. Most of its focused on a handful of pet countries so far though. But still…billions upon billions and there seems to be new announcements every week. Makes you wonder what their plans really are. I am sure its not coming for free….there is ALWAYS a pricetag in the end.

        bb
        May 01, 2015 01:01 PM

        My guess Bird, its exactly what they say it is, trade.
        Course, they think in centuries, so I guess we might never know.

    bb
    May 01, 2015 01:53 PM

    Oh, their domesic market, the Chinese middle class want “stuff”
    For example, that apple I phone? The Chinese just released a domestic version, somewhere around 1/2 the price, does about he same thing.
    They are going to get product to their own people and there are a lot of sales to be made.
    Also, apple share in China could drop off.
    Chinese manufacturing increases, American decreases.
    I wouldn’t buy apple now with your money. lol

    bb
    May 01, 2015 01:58 PM

    Another market that might continue to do well is Russia, notice their currency?
    If I was to open a foreign trading account it would be China.
    I like Russia too but governments might look at it as suspicious.