Minimize

Welcome!

Doc’s outlook for the potential of another QE and gold and silver.

August 26, 2015

We chat with Doc today about the conventional markets and if we are in a full on bear market. We then move on to the potential of another QE program initiated by the Fed. Finally we end with the weakness in silver and gold.

Click download link to listen on this device: Download Show

 

Discussion
117 Comments
    Aug 26, 2015 26:26 AM

    CRASH UP……….per Cath Austin Fitts.

    Aug 26, 2015 26:33 AM

    My Bitcoin stock is up 40% today. Safe haven moves maybe?

      Aug 26, 2015 26:02 PM

      Are you sure? I looked and could not see that. How are you playing Bitcoin that it went up 40%?

        Aug 26, 2015 26:34 PM

        BITCF

          Aug 26, 2015 26:03 PM

          Thanks Jason. I have never heard of it and it does not come up on my lists. Pretty wild moves on that though. What do you think its future is?

          Embassy Oil Development Corporation (BITCF)
          http://finance.yahoo.com/echarts?s=BITCF+Interactive#{%22range%22:%22max%22,%22allowChartStacking%22:true}

      CFS
      Aug 26, 2015 26:54 PM

      BITCF has 302 million shares out, an average daily volume of 1k shares traded on a stock price of $0.002.
      Heck, I spent more on my lunch yesterday than the amount traded daily on BITCF. That stock is dead.

        CFS
        Aug 26, 2015 26:55 PM

        11k shares average volume; my computer didn’t like typing quickly.

    Aug 26, 2015 26:37 AM

    Last hour of trading US markets today worth watching, repeat Tues

    Talk is already out there of more QE, to swing from a rate hike to more liquidity will have the Feds credibility removed completely, GDP today was bullish next NFP release will be key

      Aug 26, 2015 26:43 AM

      More QE, music to the ears of PM bulls.

        Aug 26, 2015 26:48 AM

        not so fast Lawrence, the last QE had a quick pop in gold but then faded fast and smoked every up tic, that’s where ALL the gold gurus were 100% wrong!

          Aug 26, 2015 26:54 AM

          Yes, government need to block all exits but there has to be a limit.

            CFS
            Aug 26, 2015 26:21 PM

            Why, Lawrence, would you think there has to be a limit?
            I believe the Fed and the Treasury have the ability to create money and have decided not to allow a significant stockmarket fall.
            To me it appears that they have decided a destruction of the dollar is preferable, because that will initially not be noticed by the general public.

            Aug 26, 2015 26:44 PM

            They can pop stock to infinity but they have limited physical to control metal prices down. What they are doing is exactly metal bullish. More they print, more inflation and more potential for metals to rise.

          Aug 26, 2015 26:19 PM

          The odds of another QE are very low if we get a rate hike. I really don’t understand why everyone keeps talking about it as if its reality.

            Aug 26, 2015 26:22 PM

            We have same feeling after QE I, QE II as well.

            Aug 26, 2015 26:32 PM

            Lawrence, even the Fed is now stating that QE did not achieve its defined objectives so it would be a very hard sell for Yellen to get the Fed Presidents to sign on to another round. This is just crazy talk. I hope you understand that each QE was less potent than the one that preceded it. The only way we will get that level of intervention again would be under an entirely new program with a new model for stimulating the economy and one that was much more direct. But why would they do that since it has become obvious the dollar is in decline and resources are almost literally at their bottoms? Inflation is coming whether you believe that or not and under such a scenario the money creation of the past is already more than sufficient to ignite an inferno of price rises unless some is withdrawn.

            Aug 26, 2015 26:52 PM

            I am with you in regards to another QE A.L. At least for the next little while there will be no sudden implementation of QE. I am surprised at how many people are all of a sudden calling for a QE right away. The Fed will prep the markets well before anything actually in implemented.

            Aug 26, 2015 26:53 PM

            bird, the purpose of QE is to allow government to borrow at cheap rate and rescue banks. If You see where the money went, you will know the real purpose. They went to purchase treasury, MBS and bank reserves. If they want to stimulate economy they have to make sure the money reaches corporations and consumers but they didn’t. If you consider the real purposes, they are successes. But all the real purposes can not be said in public since people will get angry. they are not going to make mistake 3 times in a row. If I can see why it did not work, they should know before they started. They are smarter than all of us.

            Aug 26, 2015 26:57 PM

            I am not say there will be QE in September but it come in different form later. It looks like the rate hike is off the table.

            Aug 26, 2015 26:11 PM

            Thanks Cory. We are in agreement. One thing that a lot of the armchair economists are overlooking is that there is no current financial crisis and as a result there is just about zero impetus for a dramatic expansion of the Fed balance sheet. I think that most here have forgotten why QE was initiated in the first place. But with reasonable growth and employment numbers, the lack of outward financial instability and the prospect of rate hikes not too distant the idea of QE just makes no sense to me at all. Cheers man.

            I love the wrap-up shows btw. Keep up thee great work.

            CFS
            Aug 26, 2015 26:57 PM

            They can’t logically rate hike.

            Aug 26, 2015 26:41 PM

            Of course. That’s why they must. The sooner rates begin to rise the sooner we can put this period of emergency intervention behind us and start moving forward again. It is no coincidence that the impending bottom in commodities is going to play directly to the beginning of a normalization process and the reason is because rising oil, corn, metals etc signal inflation will make a comeback. See my other post on this thread for my explanation of how this ties in with a falling dollar. All of it works together because all of it is connected.

    Aug 26, 2015 26:44 AM

    Doc calling for SLW to hit $10 is not realistic and his bearish tone on the precious metals tells me we have already hit bottom….

      Aug 26, 2015 26:51 AM

      If the dow crashes hard you really think silver will break out higher, last big dow crash SLW fell from $10 to $2+

        Aug 26, 2015 26:55 AM

        That is the place I bought, at cdn$3.20

          Aug 26, 2015 26:57 PM

          Sure wish I had silver that I bought at $3!! I don’t think we will ever see those prices again…

            Aug 26, 2015 26:58 PM

            Cory, not silver, SLW. The lowest silver I bought was 7.3

      LPG
      Aug 26, 2015 26:55 AM

      Bigbill,

      I don’t understand why SLW @ $10 is “not realistic”. It’s just c.11% lower from today’s low.
      Now, is $10 likely or more importantly is it gonna happen, that’s another matter.

      GL to all investing/trading.

      LPG

      CFS
      Aug 26, 2015 26:23 PM

      Bigbill, SLW is one of my bigger holdings.
      The management, however, has not tightened up their operation and, I think, is not running the company at optimum.

      Aug 26, 2015 26:55 PM

      SLW is still looking weak in my books. No doubt it will be much higher in the long term but in the short term with markets potentially crashing I would be very surprised to see silver have a run up. at best I think we could hope for silver to get a little bounce after today’s hammering.

      Aug 26, 2015 26:10 PM

      Bigbill; I give you a diagnosis and prescription and you go against the doctor’s advice. Just ask many of my patients on KEREPORT what happens when you go against the doctor’s advice. If you purchase SLW here, you’ll need surgery later.

        Aug 27, 2015 27:03 PM

        funny Doc.

    Aug 26, 2015 26:52 AM

    your dreaming in colors, SLW is not the same company it was 5 years ago!!!!

    Aug 26, 2015 26:55 AM

    I think if the market crashes like you say, this will only be an added bonus to the precious metals

    Aug 26, 2015 26:57 AM

    if everything was simply technicals, Doc and every other technician would be billionaires already…

    LPG
    Aug 26, 2015 26:59 AM

    Bigbill,

    Without going back 5 YEARS ago, I guess it is fair to say SLW is the same company that it was 5 DAYS ago.

    However, 5 days ago, the stock closed @ $13.88… i.e. 21% HIGHER than the $11.50 it is trading at as I type.

    GL to you investing/trading.

    LPG

      CFS
      Aug 26, 2015 26:14 PM

      LPG, I beg to differ. SLW is not the same company it was 5days ago.
      Specifically:
      August 26, 2015 – 12:13 PM EDT

      SHAREHOLDER ALERT: Levi & Korsinsky, LLP Notifies Shareholders of Silver Wheaton Corp. of Pendency of Class Action Lawsuit and a Lead Plaintiff Deadline of September 8, 2015 — SLW
      NEW YORK, Aug. 26, 2015 (GLOBE NEWSWIRE) — The following statement is being issued by Levi & Korsinsky, LLP:

      To: All persons or entities who purchased or otherwise acquired securities of Silver Wheaton Corp. (“Silver Wheaton”) (NYSE:SLW) between March 30, 2011 and July 6, 2015.

      You are hereby notified that a securities class action lawsuit has been commenced in the USDC for the Central District of California. If you purchased or otherwise acquired Silver Wheaton securities between March 30, 2011 and July 6, 2015, your rights may be affected by this action. To get more information go to:

      http://zlk.9nl.com/silver-wheaton-slw

      or contact Joseph E. Levi, Esq. either via email at jlevi@zlk.com or by telephone at (212) 363-7500, toll-free: (877) 363-5972. There is no cost or obligation to you.

      The complaint alleges that throughout the Class Period defendants issued materially false and misleading statements and/or failed to disclose that: (1) Silver Wheaton’s financial statements contained errors concerning income tax owed from the income generated by its foreign subsidiaries; (2) Silver Wheaton lacked adequate internal controls over its financial reporting; and (3) as a result of the foregoing, Silver Wheaton’s financial statements were materially false and misleading at all relevant times.

      If you suffered a loss in Silver Wheaton you have until September 8, 2015 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.

      Levi & Korsinsky is a national firm with offices in New York, New Jersey, Connecticut and Washington D.C. The firm’s attorneys have extensive expertise in prosecuting securities litigation involving financial fraud, representing investors throughout the nation in securities and shareholder lawsuits.

        CFS
        Aug 26, 2015 26:16 PM

        Like I said Earlier…….not optimum management for SLW. They got sloppy during the good years.

          Aug 27, 2015 27:05 PM

          I thought it was still Randy Smallwood at the helm the last 5 years…and 5 days….

    Aug 26, 2015 26:01 PM

    what is your point look at any other stock 5 days ago LOL

      LPG
      Aug 26, 2015 26:03 PM

      Bigbill,

      I tried to get my point across. I failed.
      No big deal.

      GL to you investing/trading – and I mean it.

      LPG

      CFS
      Aug 26, 2015 26:14 PM

      There is a comment awaiting moderation. Sorry. But you will see my point when/if it is passed moderation.

    Aug 26, 2015 26:14 PM

    look at the manipulators smashing all the metal stocks in the last hour of trading
    as they did yesterday and tell me that this market isn’t rigged …………

      Aug 26, 2015 26:21 PM

      Bigbill, there are two ways of looking at this. The first is to acknowledge that miners are taking a kick to the groin and the second is that they are setting up for a run higher (at least on a short term basis). I am in the camp that sees these kinds of smashes as buying opportunities even if precious metals miners are not ready for prime time. I have long held that silver could fall as low as 10 dollars eventually for example but in the interim there are ways to keep playing to rise and falls.

        LPG
        Aug 26, 2015 26:25 PM

        Hello Bird,

        Hope all’s well.
        +1 re: your $10 views on silver.

        FWIW, I’ve got orders lined up on SLV Calls w. strikes as low as $10.

        Best to you,

        LPG

          Aug 26, 2015 26:51 PM

          Right on LPG. I think its just a matter of time. And why not? If oil can sell at a discount to production costs of as much as 50% (Canadian Tar Sands come to mind) then why would we be surprised to see silver get knocked down another 4 bucks?

            LPG
            Aug 26, 2015 26:56 PM

            +1 again Bird.

            That’s why the marginal cost of production is always a VALUE reference for me… not a PRICE reference.

            I have just realized silver made a lower low for the (multi)year(s). Feeling like Duuuuuhhhh…

            Best as always,

            LPG

            Aug 26, 2015 26:53 PM

            I can’t be Bird, LPG……Bird was outspoken, sometimes obnoxious and far too quotable. The Listener on the other hand has a soft touch and does not step on quite as many toes. I figure its a win-win for everyone!

            Aug 26, 2015 26:13 PM

            AMEN………..

    Aug 26, 2015 26:26 PM

    I wish silver falls to $1 tomorrow but the reality is that it costs miners $17 just to produce it and the only reason its trading at these levels is because the banksters short an entire year of production each and every single day of trading.
    The day of reckoning is coming my friends just don’t be surprised to find out that the same people who manipulated this market down will do the exact opposite and make a fortune to the upside while the average investor is sitting on the side lines….

    Aug 26, 2015 26:34 PM
      Aug 26, 2015 26:43 PM

      Looks to me like Sinclair had a stroke. His speech is severely impeded.
      Sorry to see actually.

        Aug 26, 2015 26:44 PM

        Can happen to us all – live in the moment 🙂

          Aug 26, 2015 26:17 PM

          Hopefully he will recover quickly like our Big Al 🙂

    Aug 26, 2015 26:38 PM

    Doc, I got out of my shorts yesterday with SDS. Let us know when you think it is time to short again, and is SDS the way to go?

      Aug 26, 2015 26:00 PM

      Ron, I’ll try to remember to say on a daily thread when I’m personally shorting again. It’ll be awhile. I use the vixy to go long volatility and where I did very well recently was to go short the Chinese market and I use fxp for that. According to the technicals it’ll probably be well into September when and (if) the opportunity arises again. If this is a bear market it’ll get everyone comfortable again by moving up against resistance.

    CFS
    Aug 26, 2015 26:28 PM

    Since I’m the one to first mention SDS, let me respond.
    Any geared short on long ETF is a TRADING stock ONLY. It will always decay in value for a flat market. So if you want to trade in for less than a few weeks, a

      CFS
      Aug 26, 2015 26:25 PM

      i also mentioned a week plus ago changing from SDS to Sdd because SDD had more lower capitalized stocks. That was a mistake, because of relative volumes in SDS versus SDD. SDD is too thinly traded. You want large trading volumes so the bid/ask spread is not too big, if you want to trade short ETFs.
      Others in this forum can give you advice on trading volatility.

        Aug 26, 2015 26:18 PM

        Thanks for the update on that trade CFS. I am going to look into SDD and SDS later tonight.

    CFS
    Aug 26, 2015 26:35 PM

    oops! If you want to hold a shorting ETF for a slow bear market, then a non-geared ETF is safer.
    Use a -2 or -3x ETF if you want to trade and are pretty sure you expect a quick break down and then you want out.

    My foremost rule of investing is don’t lose money……….so I’m always cautious compared to most of the folks posting here.
    But I have been living off my investments for almost thirty years.

    Aug 26, 2015 26:59 PM

    Rogers Agriculture ETN Fund is now sitting right on its 2008 bottom and warning that soft commodities such as rice, sugar, coffee, wheat and others are soon to rise (if the chart does not break lower).

    So a heads up of agriculture all you farmers! It a good news day.

    Rogers Agriculture ETN Elements (RJA) — From Barcharts
    http://www.barchart.com/chart.php?sym=RJA&t=BAR&size=M&v=1&g=1&p=MO&d=X&qb=1&style=technical&template=

      Aug 27, 2015 27:12 PM

      Yes, I’ve been watching RJA and JJA lately for a clue on the Agricultural commodities.

    Aug 26, 2015 26:10 PM

    Silver fell right to the middle support of this Schiff fork before bouncing. It is also now two cents below the 200 month moving average.
    http://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=4&mn=11&dy=0&id=p73041707208&a=398349731

      Aug 26, 2015 26:15 PM

      It looks to me like we get one more day of declines on the miners and then its lock and load time for another round. Yesterday I commented that I thought we were recharging for a move higher in metals and that is growing increasingly likely as today’s declines would suggest.

        Aug 26, 2015 26:19 PM

        A listener: I believe you’ll be correct about your feelings. It may happen as soon as next week—-however, don’t expect it’ll be a start of a big run. By the way, bird told me he knows you and that you’re an opposite of his personality. He tells me you’re an introvert, soft spoken and agreeable guy.

          Aug 26, 2015 26:04 PM

          Birdman is a fibber, Doc. Don’t believe a word of it.

    CFS
    Aug 26, 2015 26:27 PM

    Counting down and hoping this nation is not completely destroyed in the next 512 days.

      Aug 26, 2015 26:25 PM

      I really hope it isn’t either CFS. I am optimistic it will still be here.

    Aug 26, 2015 26:50 PM

    Shad, check out the 30 year. So far I am right it is a short but this is only the beginning. It looks to be picking up momentum so the trade is still live in my view after only two days of declines.

      Aug 27, 2015 27:14 PM

      Yep, I have been. Thanks for the heads up on TMV as well.

        Aug 28, 2015 28:32 AM

        You are very welcome. Glad to see you back. Were you on holiday yesterday?

          Aug 28, 2015 28:34 AM

          Very stressful work schedule (12 hour days)….. glad its almost the weekend.

    Aug 26, 2015 26:53 PM

    Doc, thanks for explaining about QE. I didn’t get it until now. Thanks.

    Regarding gold, *if* Gary is right about cycles, that gold is in a new uptrend, and is just correcting here, then I’ll have to add cycles to my TA toolbox, because TA by itself isn’t enough. I am patiently watching to see what happens next.

    I’m a math/physics guy, and so naturally cycles appeal to folks like me. But to use cycles for human emotions is really, really interesting.

      Aug 26, 2015 26:28 PM

      After talking to Gary everyday now for quite some time I can say that cycles can be a valuable tool. It is made even more valuable when combined with a couple other factors that I think Doc is doing a great job putting together. As for the major pop in gold thanks to a new weekly/intermediate cycle he is saying this should come in the 2nd daily cycle. I was disappointed how quickly the run in gold fizzled out.

        Aug 26, 2015 26:54 PM

        Yea, I know, and most people were. But I wasn’t. Gold often falls when the S&P starts to correct. What I do find interesting though is that gold hasn’t fallen all that much. GDX has because it’s companies/stocks, like the S&P, but gold has not. This shows it’s resilient. I think Gary’s going to be dead on correct that gold is in a new intermediate cycle.

        The only 2 things I don’t get about cycles is, why they are so irregular, and also whether or not they are reliable in a manipulated market. FYI I’m not 100% sure this market is manipulated, but if it is, do cycles still work, I wonder.

          Aug 26, 2015 26:00 PM

          Mr Tokyo,

          I only know a bit about cycle theory, but I am still convinced that in these markets they can help.

          Aug 26, 2015 26:16 PM

          Bill: I can agree that gold is in another intermediate cycle—-however, we may move higher again in about 1-2 weeks but we’re going to be in a trading range for awhile.

            Aug 26, 2015 26:19 PM

            Thanks Doc!

            Aug 26, 2015 26:08 PM

            I thought you said that charts were telling you to stay out of the PM sector for the next few months?

            Aug 26, 2015 26:22 PM

            Bill, what I’m saying is that don’t expect any change toward a bull market in gold anytime soon. You may get an occasional trading rally but the trend is still down for the PMs and the stocks. I may take an occasional position when it appears we might get a short term rally but I’m not going to get serious about large positions anytime soon.

            Aug 26, 2015 26:44 PM

            Yup, I hear you. That’s what I thought you were saying, too.

            In contrast, Gary is now bullish on the PM sector, for now anyways. And although I can’t speak for him of course, I think it’s because of cycles (plus COT, sentiment, etc.). But his cycles are telling him that he’s in the zone for a significant rise. And, so far he’s been right. And at a time when everyone else was out. I was out, too. But, if we turn soon, I’ll take a position, and I may become a sub because his cycles seem to be working.

            As far as trading goes, all’s I care about is what works, and what is correct, so that the odds are in my favor. Gary never says things are 100%, but if cycles gets him on the right side of the trade even 1/2 the time, then he’s better than 90% of the traders out there, right out of the gate.

            Cycles is hard for me to believe in. I’m too much of an analytic I think. After hard exercise and a beer, I relax a bit, and see that it’s helpful more than not.

    Aug 26, 2015 26:55 PM

    CFS I disagree 100%, Name me one other company that has earned more money then them during last 10 years?

      CFS
      Aug 26, 2015 26:59 PM

      See my comment, which was held up for moderation above.
      I always look at the balance sheets of companies I invest heavily in and have not liked what I was seeing in SLW for several years. They got lazy, were able to borrow cheaply, and did NOT drive hard bargains for their streaming financing. Indeed had to add financing to keep up some of its streaming companies that were running out of money. So I stopped adding to my investments of SLW.
      In 20-20 hindsight, I should have sold it. (But I did not want to pay that much capital gains tax!)

        Aug 26, 2015 26:32 PM

        CFS; thanks for your info on SLW. I can’t look at all the fundamentals on all stocks so it helps when guys like you give out good info. All I know is the technicals are telling me almost 100% that SLW will see $10/share.

    CFS
    Aug 26, 2015 26:22 PM

    If you did not like Barrick today, it was because of:
    http://seekingalpha.com/article/3466886-is-barrick-gold-doing-enough-to-stay-afloat

    Aug 26, 2015 26:44 PM

    Inside reversals appearing on copper, silver and WTI. Too early in the evening to know what tomorrow will bring but its worth watching.

    Secondly….and very important for oil and metals watchers. The Canadian dollar is almost at its most critical support this year and should it reverse higher next week then metals and crude will almost certainly follow. To me this is a key development in how the next period of commodity pricing will play out. CAD has just a little more work to finish before it becomes a buy and runs positive again.

      Aug 26, 2015 26:40 PM

      A Listener, you could be very right about the near term but long term I wouldn’t be surprised to see the Canandian dollar test its’ lows (I believe in 2007) at about $.61. I’ve felt that way since it was around $.80 back in about March of this year.

        Aug 26, 2015 26:11 PM

        Sounds about right, Doc.
        $.61 CAD might coincide with $1.50 Copper
        Correlation between the two is fairly tight most of the time. I haven’t checked back to see if there was ever a time of significant negative correlation.

          Aug 26, 2015 26:19 PM

          Irwin, thanks for that bit of info—I was unaware of that correlation but it’ll be something I’ll put back in my memory bank for the future. I can tell you that copper still has work to do on the downside as do most of the base metals.

          Aug 26, 2015 26:36 PM

          That seems about right to me too Irwin. There is just one thing that would hold me back from agreeing entirely though and that is that I think the potential exists for copper to hit a final bottom near the 2.00 mark.

          My reason is a little oddball but I will explain anyway.

          If you pull up a monthly chart on copper futures (linked) and then trace out an ascending line across the bottom of the chart you will hit exactly three distinct points.

          Those are the bottoms in 2003, 2008 and a yet to be completed bottom at around 2.00 sometime in early 2016. There is (to my mind anyway) the possibility this will form coppers final low but it is actually telling us something really interesting.

          If the chart formation along that bottom rises at such a steep angle it implies that inflation has actually been present in the economy at a much higher rate for the past 5 or 6 years than official statistics are telling us.

          Most of us will readily acknowledge that inflation numbers are jerry-rigged to suit an agenda that is at odds with reality. We complain about it frequently and yet there is not the kind of evidence on hand yet to prove that to be the case for resources which most assume to be suffering a hard deflation.

          Anyway, this same way to chart does not work for the Canadian dollar but then it has a higher correlation to oil than it does copper anyway. We cannot know for sure if that will be the bottom until we get there but this is an idea I have been holding on too just in case that scenario plays out because it will affect just about every other chart I look at.

          My belief is that inflation will come back to life in 2016 with the rise in precious metals, industrial metals, energy and agricultural commodities. Almost all of which are seeking lasting bottoms at this stage.

          But it is mainly because the time period that would be required for the Canadian dollar to hit .61 and copper to fall back to 1.50 that is giving me a headache. Both of those ideas seem to contradict a coming end to the commodity bear market that seems more and more obvious now that the major commodity indexes have hit multi-year lows.

          Anyway….its just a theory at this time. Still too early to make a judgement.

          Copper on a Monthly Chart — FINVIZ futures
          http://finviz.com/futures_charts.ashx?t=HG&p=m1

            Aug 26, 2015 26:59 PM

            You make a good case fer sure, and I don’t claim to know how to predict price.

            $1.50 copper sort of sticks out because of the 2009 low, which seems to be a magnet on many charts. I noticed some oil producers have broken that level easily.

            But a stronger case than that for $1.50 copper is made by Gary Tanashian, and he seems to get these long-term targets right quite often.

            http://nftrh.com/2015/08/01/copper-very-bearish-in-line-with-our-thesis/

    Aug 26, 2015 26:47 PM

    sinclair comes across as having had dental work…not any mental or stroke..imo

      CFS
      Aug 26, 2015 26:01 PM

      It did not come across as a stroke to me, just old age.

      Aug 26, 2015 26:19 PM

      dental work…….looks like to me………jmo

        Aug 26, 2015 26:55 PM

        That was my first thought, too. Maybe new dentures.

      Aug 26, 2015 26:14 PM

      Agreed Agatha. Besides he’s still his lucid self.

    Aug 26, 2015 26:04 PM

    I am tired of fighting the downtrend in these gold stocks. I feel like getting out and waiting for a legitimate trend change I can invest with instead of futile attempts at bottom picking. I don’t feel like I have any edge in these pm markets. I listen to Richard’s comments and he has technical indicators that work for him, but an edge isn’t following some other person’s pov. mea culpa

      Aug 26, 2015 26:09 PM

      No problem PC. You can work up your own system anytime you are ready. Try charting off a free chart site using the technicals until you find something that works for you. Everyone here seems to have their own method.

      Doc often talks about Bollingers whereas Matthew will post with Schiff Forks, ratios and other unique methods. A few of us use Elliot Wave, Gary counts out days on a rhythmic cycle process and Rick Ackerman utilizes a proprietary system of Hidden Pivots.

      None are perfect but all seem better than using a fundamental approach. Interestingly most systems work well often enough that they support the ideas of the other guys even if each seems to specialize in a different time frame.

      For example, Rick gets right down to the one minute charts and his results are fairly immediate and often very short term, high power trades. Doc works on a longer time scale measured over a few weeks while I prefer to take my cues from the longest of charts sometimes ranging out to decades in length.

      Somehow the mix of all these together makes helps us arrive at the most accurate conclusions. I would go cross-eyed on those short term charts but I would be a fool to ignore the advice of someone who uses them daily if they were warning of something imminent that conflicts with my own ideas.

      I guess to get an edge it really help to listen to what the guys are saying from their own perspectives or what some of the posters are writing that adds to the group knowledge.

      But the best way is to start creating your own style of reading charts. It is mostly trial and error and making notes of how what you saw resulted in coming to the right conclusions on a repeated basis. You don’t need to trade what you are charting. In fact its better not too until you feel confident about a system.

      I guess my point is that no one way is perfect but all work well if you use intuition and a dose of common sense. The edge comes from regular practice and repetition. Some of these guys have been at it many years already and flick through many dozens of charts in a short session before finally making a decision.

      The only way to beat the market though is by constant practice and following a disciplined approach to technical analysis. Like I always say….there are no lazy traders. None that remain solvent anyway!

        Aug 26, 2015 26:55 PM

        Excellent A Listener. It’s interesting for me since I’m learning some entirely other technical analysis to add to what I use. I think it is already enhancing and validating my original method. In fact, it’s helping me to take positions at critical turning points and so far has enhanced my accuracy over time.

          Aug 27, 2015 27:11 AM

          Thanks for the feedback. Lower highs, lower lows, the indexes living below their ma’s, the st ma’s under the lt ma’s and all pointing down, the ADX and DI’s all in bearish configs, and so on and so forth. The pm stocks are and have been in established downtrends and I keep trying to pick a bottom. We all know the definition of insanity.

            Aug 27, 2015 27:20 AM

            Yeah, I can sure relate to that. Like trying to ride a wild horse slicked in oil. But hope springs eternal.

        Aug 27, 2015 27:24 PM

        Very well written A Listener. Yes there are all kinds of different systems and TA that work for certain asset classes at certain times, but none are infallible, and yes many focus on different time horizons. Eventually we all come up with our own systems. I also find, that if one set of analysis just is not adding up to something that makes sense, that I dive in deeper to the shorter charts or pull back to the weekly and monthly charts on a multiple year horizon and may apply a different technique or watch for a confluence of 2-4 indicators.

        I’ve learned a great deal on this site over the years, and appreciate that our regular and guest commentators come at the markets from different vantage points.

        Good stuff.

          Aug 28, 2015 28:37 AM

          Just my feelings exactly Shad. I get far more out of hearing the other points of view than just winging it on my own as was the case before. The group mind is a powerful thing to behold. The only thing is that once in awhile there is a negative theme that seems to infect everyone’s thinking at once. It seems to happen when there is too much posting from the deep gloom folks like Heavy Hitter and some others who tended to poison the mood with end of the world thinking.

            Aug 28, 2015 28:36 AM

            Yep. I ready for a bit more positive outlook in general.

    Aug 27, 2015 27:43 AM

    When Doc talks about the Dow:Gold ratio, it sounds like he is looking for another gold bull market to coincide with the ‘normal’ down cycle in the US dollar which is scheduled for 2016-2024 or thereabouts on previous cycles.

    I have more or less given up trying to forecast what is going to happen but Doc has been so spot on with his short to medium term forecasts that I feel compelled to listen to him keenly on the longer term forecasts too!

      Aug 27, 2015 27:50 AM

      The megaphone pattern target for Dow:Gold ratio would be about 0.7:1 as far as I can see on the log chart.

      I was piddling around with the megaphone pattern on the Dow Jones DJIA itself on a log chart. I got a Dow target of around 5800 for the bottom of the megaphone on the next potential bear market and potentially 1843 for a low if the megaphone broke down. If that coincided with the Dow:Gold ratio of 0.7 then that would give gold at $2632 at the same time. After that if there was a hyperinflation Dow:Gold could plummet out of the megaphone but I am not betting on that I can tell you with gold at $1100!

      It could be that these megaphone patterns can just die and come out of the middle as the Dow pattern did in the 1970s. So I wonder even if the Dow:Gold can ever go to 1:1 or anywhere near to it in reality. Maybe the 1:1 of January 1980 was an outlier.