How far can the markets fall before a bounce?
The selling continues today in the conventional markets. Gary Savage has some comments on how far it can go and whenthe bounce will come.
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Someone seems determined to buy XON – Intrexon – today. Not sure if it is short covering or bargain basement buyers? Dragging up ZIOP a big now also.
GDX, GDXJ behavior is merely weekend proximity behavior IMO.
And very welcome gap-filling. The action is great, in my opinion.
Gold is looking good too. Here’s Sprott’s PHYS again:
http://stockcharts.com/h-sc/ui?s=PHYS&p=W&yr=5&mn=3&dy=0&id=p75702495608&a=370904138
I’d like to see gold tack on a few more dollars before the close, but next week is shaping up to be a good one.
Certainly shaping up to be interesting in the conventional markets, isn’t it Matthew?
Yes sir, and even more interesting in the gold space!
Here’s another good piece by Adam Hamilton.
http://www.321gold.com/editorials/hamilton/hamilton082115.html
“The top junior-gold companies’ Q2 results revealed a vastly-healthier industry than anyone believes with their stocks in the dumps.”
I guess the writer of this document forget to include the big debt position of all major gold companies, and contrary to his belief AISC is a better measure than cash cost as it uses the capex needed for the life of mine, so can not be deleted.
Sorry, but I am afraid financially gold companies are in the same shape as gold was $300, terrible, and gold companies are ONLY a call option on gold, without time value.
He did not ignore debt… “Each company’s cash cost per ounce, all-in sustaining cost per ounce, and AISC guidance for all of 2015 is noted. I also looked at balance-sheet strength in terms of cash on hand, cash’s percentage of the current market capitalization, cash provided by operations, and debt service. While the latter couldn’t fit on these tables, none of these companies had any problems easily making debt payments with operating cash flows.”
Hamilton obviously values AISC and I did not see where he said that cash costs are a preferable measure.
He did a thorough job and is right on. You, on the other hand, are correct that the miners are like call options that don’t expire.
You could very well be correct, Professor.
Volatility continues to be the best trade. Up 20%+ yesterday and over 23% today.
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ProShares Ultra VIX Short-Term Futures (UVXY) -NYSEArca
38.73 Up 7.37(23.50%) 11:53AM EDT – Nasdaq Real Time Price
Shad
I have to admit, this is a genius trade – buying when volatility is low, then just waiting for something to happen. Is there any decay in the UVXY? Can you hold it for weeks while you wait?
Brain
Thanks Brian. Ye, I believe there is decay, but as we’ve discussed in the past I’m not to worried with decay at a 41% profit 🙂 I’m cashing out though.
My only point was that I doubt many people made 40-44% the last few days on many trades, and I brought it up about 5 times last week (where I made a 13% profit from overnight to pre-market trading) and mentioned it again twice earlier this week as a great trade to be in. Volatility was down so low, and the stocks were teetering on a pullback. I believe Doc uses VIXY which is another good option.
Here was yesterday’s wrap up.
On August 20, 2015 at 1:18 pm,
Shad says:
ProShares Ultra VIX Short-Term Futures (UVXY) -NYSEArca
31.44 Up 4.64(17.31%) 4:00PM EDT
After Hours : 32.61 Up 1.17 (3.72%) 4:17PM EDT – Nasdaq Real Time Price
Up 21% today from open to after-hours trading.
OK, that was a good call Shad. Maybe I will go back to reading some of your posts after all.
Every stop and think I read all the comments and at least consider each one?
Thanks.
Nice trading!
I cashed out earlier today but UVXY climbed even higher to end the day. I think it will pullback hard if stocks rally and snap back the beginning of next week.
Still today was an impressive run, following a great run yesterdy:
ProShares Ultra VIX Short-Term Futures (UVXY) -NYSEArca
42.22 Up 10.86(34.63%) 4:45PM EDT
After Hours : 41.40 Down 0.82 (1.94%) 6:58PM EDT – Nasdaq Real Time Price
The Fed is about to begin to get its desired price inflation.
Unfortunately it will come in the form of STAGFLATION.
I just started buying blocks of UWTI today. I am probably early for a turnaround in gold.
sorry … “turnaround in oil”
I am considering doing the same thing Brian…..just not sure if it may still be a bit premature. I wanted to see $38-$40 and oil is right there at $40. Longer term I’m sure Oil will make it up to the $50s and $60s again at one point, but I’ve been holding out for the high $30’s. This looks like a good value for longer term though regardless.
I agree with you there, Shad. I’m thinking 33 to 36 being bottom. And soon.
Even after what Gartman said this morning!
Some of the rig companies are going up today.
Drillers? or rig manufacturers?
Drillers. I have a few on my watch list and about half are down but the ones considered stronger/better position are up.
Drillers should bottom first I guess
They dipped into the red, except RIG, when oil went under 40.
XON and ZIOP – biotechs – are doing some bizarre rally thing. Thing there is some secondary offering of XON today.
Oops, I meant Nordic Ameri and not RIG.
I’m eyeing Oil to go back into select ETFs and Stocks soon.
There is a slight difference in these two commodities!
Brian, I include this comment for others that might follow your advice, not intended as a peronal comment.
Pigs get slaughtered sooner or later.
SurevWTI is oversold, but without a current sign of a turnaround yet, the use of leverage can get you killed while waiting.
It will be a good buy sometime, maybe soon, but not now.
I appreciate the comment CFS.
I am averaging into the trade – I actually expect (and hope) that oil will go lower. I am just terrible at picking bottoms, so I average into a trade (Recently, I did it with JNUG from 7.10-765)
Check the sugar charts I posted below Brian. Three easy ETF’s and ETN’s to play it by and all of them are down 30% plus this year. I don’t think picking bottoms gets easier than this. Not that sugar can’t keep falling. Who the hell really knows eh? But holy crow….I really doubt its going to zero!
http://finviz.com/futures_charts.ashx?t=SB&p=m1
Good thoughts on sugar bottoming.
did you read Jim Sinclairs comment this morning? You should!
Never sell? If I am not married, I may do it.
Thanks for the link, Matthew!
Sound argument for $50K gold? Well, I guess!
LOOOOOOOOOOOOOOOOOOONG
I think the DONG has sounded the currency wars…….DING DONG……..
For a long, long time, Indiana! Maybe $5K gold in the very distant future!
Heard it Jimmy, heard it.
Thanks for the tip Mr. Winston!
Since energy and politics come up often here, here’s an interesting interview:
Wind and Solar, and Carbon Taxes: The Trouble with Leftist Energy Policy
https://www.youtube.com/watch?v=ocHTV5yg2gc
Good interview on some of the fallacies in thinking around renewable energy. I am still a fan of Wind and Solar and other alternative energy sources, but it is important to deal in the real, and they are not anywhere close to replacing the sheer mass of energy that fossil fuels or nuclear power produce for the energy grid, nor at the low costs of the latter. Good stuff!
Dow below 17K, Nasdaq below 5K, S&P below 2K. Nicey next to crash. Woohoo!
Surprise, surprise, Jason!
It has to happen at some point!
The Russell posted a reverse H&S on the 5 minute chart and broke out of the downtrend. Dow, S&P and NASDAQ look to be following in its footsteps in the last half hour. Actually the Russell looks set to close in the green for the day so stay on your toes.
Looking at the 60 min SPY chart, it does look like we’ll at least get a bounce very soon. The volume is supportive of a low even if it’s not THE low -which it probably is not.
I have to add that, looking at the daily and weekly charts, stocks could spend quite some time going lower before a meaningful reversal happens.
Yup, there was no follow through on the other three indices (except they kept falling)
I will be very interested to see the close in about 1/2 hour!
I see Armstrong is calling for a continued sharp drop next week if the DOW closes under 16,680….and it looks like that is what will happen if we don’t get a turnaround.
Going to be a long week end for a lot of people……………………..jmho
Whats that expression about “shitting bricks”? ….oh yeah, I guess that’s it!
Gary you’re making me cry!!!
stewie
There is no crying in trading (or baseball)
https://www.youtube.com/watch?v=cx2Sps9aMcY
Brian
good one 🙂
Diss is all controlled manipulation ! COOL COOL !
DOC – Plays Cool !
Yes he certainly does, Frank. By the way where did you think up Xing Xiang?
A Girl i know in China ! I sometimes think !
Hi Gary, it’s interesting that silver is NOT participating as gold moves up. One would think that with the high level of shorts the squeeze would have started big time by now. Would this be an indication that the silver shorts believe this move up for gold etc will be short lived and therefore are staying the course to further enjoy the silver ride down.
I also find that to be very curious DGHH!
The difference between gold and other precious metals is often explained by the fact that gold volume is more dependent on the fear trade.
Gold is thought of as a store of wealth, whereas silver is a monetary replacement for fiat.
Of course that is a good and valid point, I just happen to like the “poor man’s gold”!
NESTLE should have to give every citizen in Callly fornia…… FREE BOTTLED WATER FOR TWO YEARS…..JMO
Plus free Chocolate bars for life…………………….lol
Good idea FFM….The Long…..OOTB……THE BOOT……BEARCLAW……CCF.
Yes there are 2 documentaries I watched a few years back “Blue Gold,” and “Flow.” They both targeted Nestle as the absolute worst abuser of community rights and they have high-jacked many local water sources all over the globe. Normally if I have another option I won’t buy their water.
ditto on the…..option I won’t buy, but, I will go thirsty first………ccf
Did not know that Shad, please provide some links. Thanks
Flow Documentary – 1 hour 23 minutes on what is happening to water on our planet.
Blue Gold World Water Wars Official Full Length Film
1 hour 30 minutes
Well it is FRIDAY………and gold going into weekend is up…….3-4 week in row.
Monday another story.
Car-full maybe ! You know the Bankers basters !
ditto…..
I hope Gary is right about this, but 1550 for the S&P is hard to believe. I would not wait until 1550 to buy. Jim Puplava says that a market correction of 10% would be a buying opportunity and he has been correct about this bull market in stocks all along.
Puplava is a strong follower of Armstrong
Well, today you have got your DOW top to today’s close of 10% or there abouts.
I listen to Puplava a lot and respect him. However, I think he is still anchored in the old paradigm of business cycles, Fed control, etc. IMO what we’re experiencing is something of a different kind that, at some point, is going to become a collapse/ reset/ cleansing of the excesses of the Keynesian foolishness we’ve been subjected to.
Not say Puplava is wrong on this one, but I do think his conclusions of how this will play out over the next few years are wrong. He still believes, eventually, the Fed will start raising rates and returning us to a “normal” trend.
IMO that’s broken thinking and we will have to have a collapse (not Mad Max, just a complete monetary reset) which throws the assumptions about getting back on what’s been considered a “normal” path out the window.
I lost some respect for Puplava when he decided to knock “the gold bugs” like his new hero Marty. (It’s funny how followers like to take on the characteristics of their leaders no matter how low-class or off-putting they might be.)
He did not help his listeners any in 2011 and was even recommending gold stocks (NEM comes to mind) after the top, yet he’s still quite special in his own mind.
Jim Puplava is still pushing the conventional markets this weekend on a Buy The Dip mantra, which surprises me. He was though an early one to cool off on the goldbug case and t realise that the general markets were going to be strong. I would have expected that he would have seen that more as a trade given his previous emphasis on fundamental s on his show over the past decade.
So I thought he would have turned more away from conventional stock markets by now. I think he may have been a bit too much swayed by some of his technical analyst guests.
Of course, he might be right, as might Gary on a correction followed by another upleg. However surely that would be against all fundamental sense?
I didn’t remember if Jim P overshot being bullish on gold as Matthew mentions but at least he didn’t overshoot by four years like some!
You’re correct, I don’t think he overshot by years. I was referring to a show in October or November 2011 in which he liked NEM right at what was ultimately the top. I’m sure it’s in the archives.
As I’ve said before, I think he’s basically honest but he used to be much more critical of what’s unfolding and now he seems little too ok with it all -even a bit elitist.
GDXJ is posting a double top on a 6 month chart. Hope this link shows up right. If not, plug in 6 months and have a look.
http://finance.yahoo.com/echarts?s=GDXJ+Interactive#{%22range%22:%226mo%22,%22allowChartStacking%22:true}
TCK-B (TO) is sitting right on its 2001 peak today.
That’s an interesting support layer Teck Resources is at. Do you feel it may reverse soon?
Should bounce off that support but I think ultimatly it is going all the way to the long term bottom at this stage.
Sugar Alert! Sugar futures are a hair away from their 2010 bottom. Bloomberg Sugar ETN (SGG) which had been trading over 100 dollars in mid 2011 (about the time gold peaked more or less) is now at a deep discount low of 24 and change.
Sweet deal. I can’t pin down the gold bottom but sugar looks like an easy call.
http://finance.yahoo.com/echarts;_ylt=A0LEVjM4g9dVzr8AGiwnnIlQ;_ylu=X3oDMTE0cmIwaXVzBGNvbG8DYmYxBHBvcwMxBHZ0aWQDUFJEQkNLMV8xBHNlYwNzYw–?s=SGG+Interactive#{%22range%22:%22max%22,%22allowChartStacking%22:true}
Sugar futures….time to sweeten your life perhaps? You decide if this is the bottom (monthly chart linked)
http://finviz.com/futures_charts.ashx?t=SB&p=m1
Gary,
You state that we are in week 2 of an expected 6 to 10 week up cycle for gold and miners. If the intermediate cycle bottom was on July 24 (as per the charts), are we not ending week 4 of this cycle?
Thanks.
Hey Gary…..does the Fed still have our backs? 🙂
Just fooling around, man!
Certainly it would not appear so as far as Friday is concerned!
Canadian dollar looks almost ready for a bounce as it puts in an interim bottom. That is bullish precious metals in my books so gold looks positive for next week.
Where is Bill when we need him. He’s been pissing and moaning for the last 6 months about how anyone believing in a stock market crash was stupid and his GURU assured him that the dollar couldn’t go down and gold couldn’t go up.
He’s gone silent. Is that because his GURU has been doing nothing but belly dancing on crutons and didn’t notice the market crash that Bill assured us couldn’t happen?
Thanks for not bringing up the Arabs and/or the Jews/Semites
I just found a chart that has almost exactly what Gary Savage is looking for:
http://goldtadise.com/?p=350238
Correction to 1550 then move up to 3400.
As for me, I have no idea!
Here are the details for Saturdays free conference call.
http://blog.smartmoneytrackerpremium.com/2015/08/smt-conference-call-3.html