Doc’s Monday Commentary
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Is Big Al correct, when he says “I believe that September will tell the tale.”
Why do you think that Charster?
I think oil is in a washout phase. I know it’s over sold right here, but I still think it’s got lower to go. Either we get a spike up for a bit and it washes out. Or it’s just washes out and bottoms.
So isn’t that already in the buy for the longterm ballpark area then?
I wouldn’t buy it right now thinking it’s going to hit the mid to low 30s. NUGT is good right now. But DWTI might be good real soon for a short term trade.
I don’t think it will get to mid 30s as everyone, up until today, seemed convinced that it would.
Chartster, I agree we’re about to have a bounce. But I would be very careful at that point. Based on experience with charting I would be very surprised if it develops into any long lasting move up.
My sentiments exactly, Charley!
Doc – Volatility is gradually starting to rear it’s head. Check out the action in UVXY recently. I know you don’t really swing trade often, but this one has been a blast lately. Rather than shorting the markets lately, I’ve just been buying UVXY during extreme complacency and then selling when the markets gets roiled and it spikes up.
I’d really enjoy any thoughts you have on the VIX and volatility possibly returning due to the topping pattern in the general markets. Cheers!
For clarity – I realize that volatility is at an extreme low overall, but my question is, do you think we are at a tipping point here, and we may see this trend reverse in a big way?
August 10, 2015, 12:40 P.M. ET
A Tale Of Two VIX Signals
The real question is:
How long will it be before the US Government is the biggest player in US markets…..
First Treasuries……
Then the general market……
Inquiring minds want to know!
Don’t believe me. OK , What’s to stop it?
Had a few glasses of wine last night with a fellow, can’t use his name because of his position, who said the Chinese Stock Market has worse odds and more corruption than Macao.
This fellow would know first hand,trust me!
You know Doc, I agree with you in general but also think this rally could run quite a bit higher than your talking. It may in fact be a prelude to a widespread anticipation the stock markets will run into trouble in the fall and on that basis there could be some front-running of the market taking place. It would not take much enthusiasm to move miners at this oversold stage either. And on the issue of the dollar…..I agree, it is still heading down and is well within its falling trend channel. I am actually sensing that it has a fair decline in the works on this cycle (without putting a number on it) but that should reflect well on resources and commodities of all kinds.
For a few weeks I have been thinking that people will simply begin to move into commodities because they are so beaten down and conventional stocks are so high.
Yup, I agree. This does not seem to be the bottom of the commodity cycle but there is absolutely no question good value exists in selected areas. Coffee for example may have hit bottom already and it is not alone. I am watching rice, wheat, sugar and many others for signs of the turn and I find that pretty helpful.
I was watching sugar daily but gave up a few months ago. I think the metals will turn up before the foodstuffs do.
Hey Bob, isn’t Mark Carney also warning rate hikes are coming? Maybe early spring? It’s not just the Fed talking that way lately. And I have been reading things are actually heating up over there.
I suspect the rate moves will coincide with the bottom in commodities markets because that will signal inflation on the rise as resources start to move up again. The Fed’s Fischer has more or less stated that today anyway when he noted the low prices for commods is not a permanent feature of the markets.
No, last week he said that rate hikes probably would not happen until the Spring. At which point I knew that gold and silver were probably going to rally.
The BOE and Fed work hand in glove and their interest rate talk is always co-ordinated.
I am looking to start buying into oil resource companies for the longterm – the likes of RIG and others – so I am a tad miffed to see a bounce in oil at the moment. I was hoping for oil to go to aboutn 40 bucks… at which point I would start buying big time… even if it then fell to mid 30s I would not worry as I think that once oil turns back up it will be 70 or 80 bucks within 12 months.
I don’t believe that will be the reason. More in the upcoming newsletter!
A listener, you could be right that we have a good rally here—-I do believe we see at least $1130 as mentioned. What bothers me is that we might have seen an early intermediate cycle and if we have I’m pretty sure we see a lower price for gold in about a 4-5 month time frame.
The one thing that is most encouraging to me Doc is that investing in commodities of most kinds and the companies that back them has become a really low risk proposition these past few months. We could lose short term and still win by choosing selectively. There is no question the odds favour the resource sectors and ag commodities though. So it is really just a matter of how strongly the market comes back or if it is a long slow grind up from the bottom. My sense is that so much more damage is waiting in the wings on the deflation front that a year or two could easily pass before there is the kind of movement some people here are expecting. I am not in the V shaped recovery camp. More like the buy and hold and just wait category.
I couldn’t agree more with your comments.
And I too, could not agree more with your comments!
As I will mention in the upcoming newsletter, I personally think that now is a good time to start taking some positions in the miners. (NOT INVESTMENT ADVICE AT ALL!)
100% in agreement with that comment Al.
THE worm has turned, so to speak. ……..no disrespect intended………
time to feed the goldfish…………….
hi Chartster!I think that the symmetrical triangle has morphed into a zig zag.Gold can retrace up to 23.6%-38.2% of intermediate wave 3 to target the 1107-1126 level and down it goes again.
Thanks Don, was hoping for a bigger pop. But hey, I’m ready for the wash to get underway too!!
You may just get that pop Chartster. To me it looks like a very significant move up in metals will happen this week. I could be wrong of course but that’s my instincts talking.
this move up in gold has caught up many traders on the wrong side of the trade.tomorrow gold is gonna move up too but the day after tomorrow I think that we would see a reversal in gold to lower lows
Is that a gut feeling or based on some technicals?
based on technicals bob.I am not expecting gold to get to 1200s at this bounce.technicals are turning to neutral again.This is a bull trap imo.minor wave4 of 3 of 3 of 5 is still in the making.It is a bit complicated to explain the count but a lower low is very near targeting 1071-1032
Thanks.
Don,
After reading your post I went and looked at some technicals I don’t normally look at. I do believe you are correct. This is a bull trap. I think gold is going down for Tuesdays trade, and then it resumes upward. Thanks for the heads-up!
you are welcome chartster and bob.We see what tomorrow brings and act accordingly.we keep in contact guys.
Good thoughts Don Corleone and Chartster. Cheers!
Probably not #1200 but how about the mid to fairly high $1100’s?
1130 to 1140 is what I am expecting Al .
That seems like a reasonable target Don Corleone. Best to you sir!
I thought we had a date at the 1225 area before gold would start it’s washout phase. I think this new intermediate cycle will be the one that ends the bear market in metals. Maybe we only have about 8 weeks or so to the bottom. ?
Sinclair …………gold getting ready for $2000, because of GREEK LOAN , and dollar going down………
Sorry, I cannot agree on this one.
I should have suggested reading his article and the reason WHY, …….
Being a series of EVENTS…….which starts with the GREEK DEBT.
There was no mentioned as to the time required to reach the amount stated.
World events, and the awareness of same, will cause a run to safety, as some have noticed, KILE BASS , HEDGE FUND MGT. , has taken PHYSICAL DELIVERY IN MAY 2015 OF $1billion……Wall street and Main Street are ignorant of the NAKED man behind the curtain.
FFM the Claw Dawg,
Sinclair is wrong. Gold is going to plummet soon. He is right about it over 2000 tho. Just not this year. Tell Bo too.
CLAW DAWG HERE………….hello Chartster……..he did not say this year……only, as a result of the cause and effect of the Greek debt, the EU will play havoc with the DOLLAR, and gold going higher as a result.
Why tell Bo? He has all of the answers!
Ha Ha!
I think this time next year gold is at 2400
I like your thinking…………….the CLAW DAWG…………..
Wishful or based on what?
Al,
Based on the bottom of gold this year. Based on the value of the dollar and what backs the dollar. And also based on the volume of dollars in circulation. Gold will be going up by winter.
I am averaged in on ECA at $14.5. It just broke above $7 this week. I want to average down in December.
Be careful. EcA has a lot of debt.
Su and HSE might be safer.
BBC reporting is as the biggest devaluation for a decade. Two percent.
Want a coal mine? How about a coal mine for a buck? That’s all folks. And so, one massive Australian energy reserve just sold for….a single old buck. And its not even a US dollar because it was priced in Ozzie dollars.
Anyway, for the curious, Stanmore Coal leaps above its 50 EMA on news its has acquired the 30 million metric tonne resource at Isaac Plains and its stock price almost triples (currently trading for 12 cents).
Vale and Sumitomo bailed on the property in a cost cutting effort after coal prices crumbled. Incredibly, I just read that Sumitomo had paid 430 million dollars just 3 short years ago for a half stake in that same mine. Now they have all of 50 Ozzie cents to show for it.
I wonder if any heads will roll? Anyway, I thought this was a pretty interesting story. It brought to mind that new project by Keith Neumeyer called First Mining Finance whereby they go out and pick up good quality distressed properties with plans to sell them into rising demand in the future.
Guess Kieth missed out on this beauty but it does go to show there are huge deals out there for….basically nothing. So I love that idea of his. There is brilliance to the FMF model.
Is it not amazing just how bad its gotten in the resource business when the likes of Sumitomo just walks away on half a billion dollars investment and some peanut penny stock company with little or no capital to speak of snaps it up for an an Ozzie buck. The world is Nuts man!!
STANMORE COAL LTD (SMR)
http://www.bloomberg.com/research/stocks/charts/charts.asp?ticker=SMR:AU
————————–
Three years ago this coal mine was worth $624m. Now it sold for $1 — Mineweb.com
http://www.mineweb.com/news/energy/three-years-ago-this-coal-mine-was-worth-624m-now-it-sold-for-1/
I won’ T touch gold mines.
Coal mine…..of course I understand. I was not recommending it. Just thought the story was amazing and worth writing about since its another sign of thee bottom approaching. Can it get more bearish than this?
Hi Doc,
you were 100% correct about XON. wow! great call.
what you think now? Is this a candidate like apple , googl to keep adding every big dip for 10-15 years?
Thanks
Doc,
What are your thoughts on oil? I’m thinking this is a little bounce for a few days and then we head south to the mid 30s pretty soon.