Big Al is getting very concerned. Is he crazy?
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It seems investors are losing faith in The Fed as there is broad-based selling in stocks, bonds, and the dollar. Need QE 4 sooner ?
Don’t read too much into it. It’s just the normal move down into a daily cycle low. Once it’s finished later this week or early next then the market is going to make another test of 5132 before a larger intermediate degree correction begins.
If you assume that my time frame is a bit longer than just a few weeks, I think that you too are agreeing with me, Gary.
Yes in the big scheme of thngs stocks need to have a move down into a major 7 year cycle low before the bubble phase of this bull market starts.
Either in June or July we will get a big correction in stocks. That will be the next really good buying opportunity.
I kinda think that you are agreeing with me, Gabriel. Pretty soon we will not be in the minority, my friend!
QE4 nonsense! the Feds will raise rates and then have the ability to cut rates looooong before ever returning to another form of QE, negative European rates is sending capital flowing into the US markets a form of forced QE stimulus
The Treasury markets are now suggesting the bond markets are focused on a rate hike cycle to begin
NFP Fri most likely a blow out bullish print suggesting a rate hike sooner rather than later
Good comments on negative rates in Europe pushing funds over here JJ. I continue to believe that the US is in a better position than a couple other large economies/countries and that is what can point to.
Good thoughts Original JJ. I think they’ll raise rates as a symbolic measure, only to cut them again as their first line of defense. We may get more QE down the road, but I still see so many doubting the 2015 rate hike, that I think they’ll do a September surprise and hike interest rates more than people are expecting. ((50-75 points)
Interesting thoughts from Gary about the Fed worrying about a 5% – 7% correction out of fear that it could waterfall into a 15% to 20% correction. That makes sense as why go to such trouble to prop up this market – the slightest drops now appear to be bought back the following day.
It makes sense though as this is what they appear to have been doing for a few years now – and each time the energy seemed to come from buyers to then subsequently drive up stocks to new highs.
But now everything just feels exhausted – it is hard to see where the energy will come from to go higher until these markets are allowed to correct in some way first.
Just thinking out loud.
JJ,
Agreed. The Fed will raise rates some time this year. QE4 only starts if stocks drop more than 15%.
Its going to be a war on spin as a bullish NFP will suggest rate hikes asNFP data is the main focus of fed data watch, the spin will be the US economy is healing/growing which should put in a floor to any sell offs that and the fact the US equities are in a clear bull market will have the technical hedge funds buying the dips as they should during a bull run
Is you “out loud thinking” agreeing with me, Bob UK?
I am not sure what I am thinking to be perfectly frank Al ๐
I think I think I am agreeing with you – remind me what you think again. ๐ This surely has to go down first now. With less and less volume on the conventionals how on earth can these markets not correct? It is crazy.
What I am thinking Bob UK, is that events are such right now that I am looking very bullishly on gold.
funny Bob UK……. I think……
Agree Bob UK. In a “normal” marketplace the stocks would correct 5% to give people the courage to go long again and start another impulse leg up to new highs. Preventing that correction, has been confusing, and now nobody wants to be the bagholder buying at the top so things have starting channeling sideways.
If the jobs number is not pretty, we’ll probably get another 2-4% correction in the general markets, over the balance of May/June. If it is a good or average jobs number, then there’s no telling how long the charade will play out….
Sooner rather than later s 10% correction is coming!
They do seem to be bought back shortly thereafter don’t they Bob UK?
From the guy who has correctly called the overall trends in gold, and global equities…the $5000 Gold question, answered
It’s hard to be impressed with a guy who keeps saying: “You would have been far better off buying stock in 1980 and selling the gold.” -No kidding, but he completely misses the point of gold.
He always uses that secular top for gold/bottom for stocks. Why doesn’t choose 1970? or 2000? Better yet, why doesn’t he stop comparing gold to stocks and start comparing it to the dollar like he should?
Gold has clearly maintained its purchasing power while the dollar has not. YES, gold protects from inflation, just not with a tight correlation. The only way an intelligent and honest person can argue otherwise, is if their definition of inflation is incorrect.
Despite coming down sharply from its 25-fold increase top in 1980, gold remained 10-12 times its 1970 price throughout the 1980s. Cars, houses and most other items did not go up 10-12 times in that period. A good middle class home in So. Cal. in the early 1960s went for about $25,000 or 700 ounces of gold. Today, 700 ounces is enough to purchase the same home and leave a couple hundred thousand dollar to compensate for 50 years of depreciation. That’s right, depreciation. Thanks to the Fed’s funny money, most people don’t know that houses depreciate just like everything else —in real terms.
So, for the safe storage of accumulated wealth, nothing beats gold. The Dow was obviously a better place for capital appreciation in the early ’80s, but it was equally obviously a much worse place to be in 2000. Despite gold’s plunge from 1923, the Dow would have to nearly triple in order to catch up with its gains since 2000.
Agree not any point of comparing points of return if one uses different price value start points.
The gains and losses I’ve made in my lifetime are behind me which really mean nothing, as a trader your only as good as your last trade your last months % gains or YTD % gains.
I don’t get hung up on his opinion as there is no point, its the capital flows that he has the best handle on and if I want to look back since golds top in Sept 11 my majority of gains have been made from short positions within the pm’s sector than long positions yet YTD its been from long positions, so I continue to trade the chart data and will do so if gold goes to $800 or $8000 it really doesn’t matter to ma at all as I trade the trend not the outlook
its funny to see so many so called gurus who have called golds trend completely wrong these past few years now suggesting fall of 2015 and 2016 as key years, I guess they read Armstrong and ride off his ideas just as C.M. has mentioned $5g gold recently, what a joke!
I agree that there are plenty of people using his calls, but calling for great action in the sector for 2016 doesn’t require MA at this point. Just look at the monthly chart of the miners going back to 2000 and we can see that the real top of the bull in terms of strength and momentum happened in early 2008 and that the move to a marginal new high in 2010 was really just due to the energy stored by the late 2008 crash.
So it was up for 8 years and correcting for 8 —taking us to 2016. The various indicators, sentiment and position of other markets right now make a call for good action in 2016 a fairly low risk bet in my opinion. I know that Armstrong was calling for 5k gold in 2016 back in 2009. If it happens, that’s much more impressive. Here’s a monthly look (if you’re a subscriber):
http://stockcharts.com/h-sc/ui?s=%24GDM&p=M&yr=16&mn=7&dy=0&id=p88019340388&a=397649196
As for MA’s record, he was waiting for $2 silver and new lows for gold at the start of the secular bull market 15 years ago. He also apparently called the top at 1500 in 2011 —more than 25% too soon (from what I’ve read, I don’t know this for a fact).
32,000 dow in 2015? It better move quick or he is just another so called guru what awful timing.
Gold 5000 in 2016?
http://youtube.com/watch?v=ersOJve_4f4
No one will ever get timing spot on! I will add that I like his thinking and he adds value no doubt. Everything with a grain of salt.
Here is another link,, Scroll down to the bottom and his timing for gold is all over the place.
One of the biggest novice mistakes any investor makes is getting hung up on predictions made by anyone Marty may well have called many targets that never ever came into print but that’s not whats, important its the trend and he doesn’t flip flop on a daily basis like so many.
$49 silver and Rick A was calling for $70+ now $1195 gold and Rick A is suggesting $800+ is possible, may never come close or perhaps another Lehman event will send gold below $700 these targets mean nothing as so many issues can take place on the way to the far off targets that nobody has a clue is coming.
glenfidish was certain the miners were breaking out at that the bottom was in while saying $30+ oil was a done deal, does that mean he doesn’t follow his on advice or did something change along the way to a target far off
The markets are as complex as they ever have been in the history of trading don’t get hung up on predictions look for confirmation of a trend, trade it and wait for the next trend making money along the way short or long that’s ALL that matters
Interesting philosophy “original” that has obviously treated you quite well.
Thanks wosom morf knrF,
That has been my exact philosophy for a long time as I have stated over and over again. That is exactly why I don’t much care just what the day to day prices are for au and ag.
That was a good Martin Armstrong thread and good perspectives from everyone JJ, Matthew, and Glen. You guys have such interesting thoughts and they are appreciated. Also thanks for posting the various links = helpful for quick reference.
I agree completely, Shad
Recomended reading for the day (quick):
The Strange Case for Gold, by M. Armstrong
http://armstrongeconomics.com/archives/date/2015/05
Best to all and GL investing/trading.
LPG
Thanks LPG
Good article. Thanks for posting it LPG.
High-Five!
I don’t see why The US can’t raise interest rates the US treasury say’s that the debt levels haven’t increased since March 15th, what’s the problem here? DT
Now it appears that the debt has increased according to a later US treasury announcement, ahhh now I can breathe a sigh of relief it’s back to business as usual. Just keep paying those bills boys. Al doesn’t need any more worries.
haha keep the money flowing eh DT. I continue to stand on the side that says the Fed will raise rates a very little amount sometime this year. I have a couple small bets with my friends on it too. However I am struggling to truly hope that I am right on this one ๐
Let’s see …
For the next near rates won’t rise.
I’m guessing stimulus before a hike.
Q1 GDP was lousy, will revise to negative, Q2 may be marginally better. Being an election year, both sides want to have a win under their belt.
Do you think they raise rates with a probable negative GDP print for Q1?
Absolutely not, Gabe!
Cory, if you watch “The House Of Cards” the American version is much better, you never know which way a decision will go because it’s not based on what’s good for the country only on what’s good for certain particular politicians at that point in time, looking after #1.
Same is true in my favorite show, “The Sons of Anarchy”.
How about the fact that the latest opinions on 1st qtr GDP could actually have been in negative territory? Probably don’t want to raise interest rates in an economy that is getting weaker and weaker, do you?
My comment was addressed to DT, Gabe and not to you!
Did you see that The Drudge report is saying The US had a $50 billion trade deficit last month, my question for you Big Al is do you think The US could default on it’s payments to other countries so that other counties are simply adding these payments on to their bill. Really how long can you keep accepting your neighbors bad cheques maybe should call in his money. DT
Can the US default. Of course it can, but can you imagine the repercussions?
It’s funny how predicting interest hikes has become a chumps game not unlike predicting a future 5K gold price;)
Confused…Yes it has been going on for a long time…$5k gold I say YEARS out…..I’m laughing to myself on this as we are in an inflationary depression….Most will never retire…..just fade away I think.
Lot of truth to that, Bill!
I am convinced that gold 5K will happen in my life time unless US dollar goes away.
Ya but, a $5K gold price is much more important because of the implications of what the world would be like if that should happen!
i’d say becoming as opposed to “has become”
After reading some excellent points tonight, I’ll continue to focus on the resource and commodity sectors. We’re getting to the point where very few people are focusing on them. This has been one of the longest periods of decreasing interest rates in recordable history and that will change. In my view, it’ll not change because of growth but instead either loss of confidence in government and their currencies and/or inflation. There’s been a creeping inflation not mentioned by many over the last year with declining growth. Can anyone say stagflation? All I know is that I’m slowly starting to purchase PMs again and will step up those purchases when silver starts to trade in a weekly trading range. I believe we’re getting close to that point. Mining shares are disliked or not even being looked at by the investing public or fund managers. What an opportunity! As far as I’m concerned they can stay away for weeks yet so accumulation can occur at low prices. I’m one who has said for months (before it was fashionable) that this move down in the PMs and stocks would be a U-shaped move down with trading sideways for months as it relates to most PM stocks. It’ll take time to shake out the weak hands but it’s beginning along with M&A activity. Also as mentioned for months is the fact that the chart scenario that looks best for the PMs to start their next leg up is no earlier then 2016-2017. I believe those who feel this PM bull is over will be gored in the end.
Stagflation: Are you old enough to remember it?
Brian, unfortunately, yes.
DOC
It was only half rhetorical; I bet you 90% of the people trading on Wall street have not. Think about it …
….and this is why we love to hear your perspective Doc. Great thoughts as always.
Doc,
You have made many excellent points and I am firmly in your camp. The really prudent and opportunistic resource investors that know how this fractured man-made sell off was orchestrated and are thinking intelligently, should be accumulating nice positions in the quality names “NOW” ahead of the PM recovery that may still be off in the future as far out as 18-24 months.
No one really knows when these beaten-down forgotten and unloved stocks will start to receive heavy bids, but its just a matter of time.
Doc personally I hope the dumb-money and dumb-market participants continues to discount these fabulous high quality small/medium junior resource companies because I want to be able to exploit this temporary weakness and accumulate size and numbers across the board for a while longer.
When Gold and Silver eventually breaks out and starts their inevitable bull assent to much higher price levels, the profits to be made in this sector are going to be astonishing.
I’m saying it now……….if you are positioned in quality names ahead of the major moves that lies in front of us, it will be common place to turn $5,000 and $10,000 dollar investments into the right companies into $100,000….$200,000 and even $300,000 dollar profit potential. That may sound outrageous to some but I assure it is not. 10, 20, and 30 baggers will be common with gold at $3,000-$5,000 and Silver at $50 to $75, maybe $100 if the bull is really on fire.
This will be my last big bull market in the PM’s so I have no intention of missing it.
Keep up the great commentary Doc!
Vortex, I couldn’t agree more. These summer months might be a little soft for many of these companies but that’s fine with me. I’m getting “older then dirt” as one of my grandkids say and I can remember markets like these where stocks traded at these levels for months—I like these kinds of markets better then 2009 where it was V shaped and difficult to take large positions due to volatility on the way up. This type of market (as mentioned by yourself) is the type where you can buy some quality companies with very little further risk to the downside and then go and watch your navel for months and not become depressed. Once the 200 week MAs on a lot of these finally plains out at pricing, watch out. Of course you never got that with those rare companies like Claude. Claude moved up vertically to meet a falling 200 week MA to take it out. Most of these won’t happen that way. This will also be my final bull market in the PMs and I will not be shaken out it either—of course, God willing that I’ll live long enough to watch it. We’ll be able to look back some day and say WOW!!!!
Watch navel.
No depression.
Maintain this.
๐
Doc,
Your two previous post make plenty of sense and I hope you live to be 100+. Your a good guy in my camp any day! I always tune in to what you have to say when I get a chance. I may not always agree but that’s what makes different minds and different personalities.
You did mention u shaped and rick was one of the first to mention “Saucer shape” recovery.
I made a call way back when, about a day or two before it happened and I said I change my mind 1180 will break. That call is here and I clearly remember Al saying glenfidish why the sudden change. That change came from within and something telling me we were headed lower.
I’ve remained throughout the past two years on the ball with this call
wti 35-40
crb 210
All along while many and I will not mention names where calling for 110 oil. The fact is that there is no perfect system or perfect call unless you get “Lucky”.
Im sure there are few in this world that know precisely where these numbers are headed and where they will fall. Iv’e mentioned im not a big fan of conspiracy or blaming government but these markets are not free by any means “IMO”.
I’ve been called a Novemberist from shad:) but quite frankly I mentioned a few weeks or months back that I was not sure 100% that the low was in. I spoke about this with Matthew a few times and we both have our views and respect each others views as well. All I have done is to remain mostly sidelines with my long terms in tact from November and even before. Im on record stating that if we broke new lows in gold, that I would only buy in if my november lows were broken but not before.
So where do I stand? Im of the thinking that equities will have a big fib correction starting this year and going into second half of 2016 election year. The initial attack on dow will hurt gold imo. Does that pain make gold go down into “New Low” or does is it go down from a much higher price? That is the million dollar question.
Doc I hope for all our sakes that a bottom is in or happens much faster then this turtle pace we are having. Time is money and time also consumes one’s life.
Well said Glenfidish. I am graduating you from a Novemberist to something new and adaptable because you have planned for if your prior November lows do get taken out at new lows.
Congratulations! You’ve become our first Neo-Novemberist ๐
PS – you also said a while back that you weren’t ruling out a low again this November, but that is a long ways off so, I’m not holding you to it, just fueling the evolving philosophy of the Neo-Novemberist think tank.
Excelsior! (ever-upward)
Brian and WMK…..try to keep up with Glenfidish…. he’s a trailblazer!!
My views on gold have been changing the last couple days – I had mentioned that gold, GDXJ, and some profitable miners were decoupling. Also gold correlations with oil and US$ were erratic. So … it feels like a pivot point to me (Something is about to happen). I have a plan to sell portions of miners if gold drops below a specific level.
Yeah I was just messin’ with ya Brian. There is definitely a decoupling with the Miner and Gold, with Gold and the dollar, with Gold and oil. It is actually refreshing because I prefer it when PMs truly are non-correlated assets.
You’re correct that something is about to happen to buck the trend, but which it breaks is a coin-toss at this point. We’ll see what happens on Friday, but that may be an “over-reaction day”. I am more curious to see the trend next week once the news has been digested.
Vortex
YES !
Witness the last run-up of Alexco from US$ 0.45 to $10.15.
$10,000 investment at the near-bottom equaled $200,000 at the near-top. I know from experience. Do you think I have $10,000 of Alexco right now? ๐
And, I might add, I would rather have a near-term loss of 25%, for the stocks I have purchased already, then to miss this very probable PM stock event.
Brian, congrats. If Alexco can remain solvent for the long haul then you will have very likely made an excellent choice.
I don’t have a position in Alexco like that at this point, but companies like Alexco and many others will be receiving my full attention and hard earned dollars as I average into positions on weakness, while weakness still lasts.
V
Agreed.
“Gold, Guns, Girls”
You have to like at least 2 of these ๐
This is a Canadian band called “Metric”, which includes:
o Super smart and beautiful lead singer
o Rickenbacker 4003 bass
o Very creative B&W filming
Was looking at Glencores annual report. Looking at all there commodity proction numbers 2013 vs 2014 and their two largest decreases in production were in silver and gold. 11% reduction and 6% reduction. That is more than 4 million ozs of silver and 60,000 ozs of gold. Then I looked at bhp’s annual report another 12% drop in silver production from 2013 to 2014 equating to another 4 million ozs. 24% reduction since 2012. Rio tintos silver production also down I think (can’t get data at moment). I am a big fan of silver. Love me some gold too. When silver production is decreasing as base metal production is increasing (the primary historic source of silver)it says something about supply in future. Dwindling.
The daily silver chart is warning of an impending decline. Below 16 dollars looks to be in the cards but a retest of the lows cannot be ruled out. And where silver goes (South), gold usually follows.
Look again at the 30 year bond on the daily chart. Now that is a giant, fat double top that has formed. It does however look like we have a bounce in the cards today however the trend looks undeniably down in the larger picture. Personally, I would be right the hell out of the long bond at this stage with the look of that chart.
TYX has not been above the 200dma in 14 months, dragging gold lower as the bond traders are suggesting a rate hike. NFP data again Fri very important!
My oil just blasted off the launch pad! Go UWTI!