Are the weak US markets going to continue through next month?
Doc joins us with a focus on the weakness he sees in the US equity markets. We then shift focus to oil which continues its run of the last few days. Rumors out of Russia and OPEC are the reasons brought up by pundits for this increase, but right now they are only rumors.
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I just cant see oil going anywhere until it stops being givin away for free.
Tuff to get cheaper than that tho so maybe not to far left to fall.
Well, I am miffed that this oil rally took me by surprise as all the oil companies I have on my buy list have surged enormously. Now I am wondering at what point there comes an opportunity to short them.
I can’t see the Saudis cutting yet – just can’t see it – as it does not make sense for them to spend 18 months crashing the oil price to get within a few months of causing disaster to oil producers globally and then just stop short of creating mass oil bankruptcies.
It would be like a man running a marathon race for 26 miles and stopping with a 100 yards to go to the finishing line.
Eventually they will come to their senses. A 10% cut could double the oil price and all the producers would make much more money with less production. I am heavily long and up around 4% today but was much higher at the open. BP has just crossed above the 50 day after going back down and bouncing off it again today. My major position. I added some RIG too but only a small amount.
Paul L. Do you think Oil may make it up to the mid to high $35s before topping short-term?
I’ve noticed that the last few tops have coincided with the middle band of the Kelter Channel and we are there at present. Just curious as to your thoughts since you follow Oil so closely.
http://stockcharts.com/h-sc/ui?s=%24WTIC&p=D&yr=0&mn=6&dy=0&id=p68298385160
My target a while back my target was the 33 to 35 area and it almost hit 35 for a second and fell hard. It is looking stronger than I expected. I had expected it to fail but is holding up well. I am afraid to dump my positions because if it launches to the 38 area it could spike quickly to the 40’s once 38 is defeated and I still have losses to cover.
Paul L.,
You wrote ” I still have losses to cover”.
If I may:
* Focus on your trades/plan. NOT your P&L losses as being a reason to stay in a trade or not.
* Looking at your losses may distract your thought process. Try to avoid it and focus on the trade/plan to start with.
* Oil/USO is super liquid: you can cut all your positions, step back and examine the whole situation and get back in anytime you want to.
My 2cts.
LPG
Good thoughts Paul L and LPG.
off topic:
P152 CEEFAX 1 152 Thu 28 Jan 11:52/30
Airbus signs $25bn Iranian plane deal
Iran has signed a deal to buy 118
Airbus planes worth $25bn in one of the
biggest deals signed since Western
sanctions were lifted against Tehran.
The order included 73 wide body and 45
narrow body jets, including 12 A380
superjumbos.
Iran’s decision to buy the A380 is a
significant boost for Airbus.
The company has struggled to convince
airlines to order the world’s biggest
passenger aircraft in the past two
years.
Chinese oil demand is actually quite robust, up 9.2 percent year-over-year, as of August.
In this case, lower prices have spurred demand; annual demand growth from January to August of this year totaled 5.7 percent, well above its rate of 1.6 percent in 2014.
http://www.bloomberg.com/news/articles/2015-09-29/jefferies-china-s-demand-for-oil-is-totally-misunderstood-by-the-market
Well I don’t know about the rest of yas but I am backing the truck up on gold miners and oil. I added to UWTI and NUGT. I also added to ECA. I am playing UWTI and NUGT for short term and ECA for long term. BABA is another long but the chart is not a buy at the moment. ECA just paid out a 7% divi so they must be doing OK.
Encana is an interesting company and I am watching them as one I plan on buying, but I’m waiting to see if in the short-term Oil may top out soon and head back down. If Oil goes down for a sustained period, as some think is plausible, then some of the stock may still pull back some more. Yes, dividends are nice, but may be cut back in many companies if the pricing rout continues.
Jason,
That’s a big if but IF China does a big deval, BABA will take it on the chin h-a-r-d.
To me, as I’ve said to Richard/Doc privately, if there is 1 Chinese stock i want to avoid if this plays out, it’s BABA.
My 2cts.
LPG
Doc, check the 1 year chart on NUGT when you get a chance. I see a small but noticeable buy signal. And those Bolli bands have been tight for a while with a W breaking above the moving average. I think we are about to break out.
Jason,
1yr chart irrelevant on 3x levered ETFs – such as JNUG – IMHO.
If you wanna trade those, better chose a smaller time frame.
My 2cts.
LPG
Jason, I believe we have another 5-10 trading days for gold to peak here and then I would get very wary.
Gold at fork support…
As long as Gold stays above that $1111-$1112 support (from the Cup & Handle or Saucer rim) then Gold is still OK. If that fails then the $1122-$1123 resistance was primary and the move to $1128 was just a blip (although $1128 will now become more significant on the next attempt to breach it).
BTW – I’m talking about staying above $1111-$1112 on the closing basis.
check out GARY’s site……some good info.
Thanks FFM….The Claw. It is a good video with Gary so I’ll post it here:
__________________________________________________________________________
CHARACTER CHANGE IN THE METALS SECTOR – Gary Savage
The 4 year bear market in gold has programmed traders to expect failure. That is 180 degrees the wrong attitude to have this late in a bear market. At this point instead of expecting failure you have to give every rally the benefit of the doubt. The longer this bear continues the greater the odds become that one of these intermediate bottoms will turn out to be THE BOTTOM.
http://blog.smartmoneytrackerpremium.com/2016/01/character-change-in-the-metals-sector.html
Using a fork based on intraday highs and lows, support did not hold…
And that’s ok. I would actually prefer some “backing and filling” here for a few days.
The MAs need to converge and the 50 day MA needs to catch up.
Hmmmm
I got PMs heading south soon. Oil heading south too.
Conventional market getting clobbered soon.
If gold gets hit along with the conventionals, miner get routed.
Just sayin..
Chartster, I agree.
Doc,
I’m glad you agree. When we disagree, “I” usually get “my” hand slapped.
I might add though that we could peak here for a couple of weeks in gold.
Doc I’d be curious to get your thoughts on Gary’s video posted up above on the blog.
He feels that there are few new factors (Gold to USD inverse correlation has broken down, Record COT levels near the recent Double-Bottom in December, and that several miners have finally broken above or started approaching their 200 day MAs).
He feels we may still have a few more weeks of upside left in the PM rally and has a number of charts he annotates to illustrate why he feels this is the case with a new cycle having just started. I’d be curious to see if this is in alignment with what you just mentioned about peaking for a couple of weeks in gold.
I have to agree that gold has weeks left. There’s nothing ominous about it right now from a weekly chart perspective.
That works for me, as I have added to some of my mining stocks in January and wouldn’t mind things running a bit further before I trimming them back. The video with Gary is pretty good and he does make a good point of giving every bottom the benefit of the doubt, and one of these days it won’t be a counter-trend rally, it will be the real rally. This is why I have added a few more mining shares this month (just in case December’s double bottom was the final bottom) ๐
Ditto on Gary’s info………………………..
Silver had a bad day compared to gold but I’m not going to read too much into it just yet…
This is not the ugliest picture by a long shot…
The trouble with this market is many stocks can loose ground in days which required many months of the bull market to gain.
What is terrifying is that people don’t know what is coming next and it is this assumption that underlies the markets.
Dick Tracy – I was just thinking of you yesterday when I was posting videos of Beaming and self-driving cars to Frank from Moscow. Also, I was curious if you had any new thoughts on technology that may have surfaced at Davos this year. One of the 8 topics covered was supposed to be Robotics and Artificial Intelligence. Just curious if there was any new trends you’ve spotted.
Cheers!
One of the other articles I saw posted about Davos mentioned world leaders and head of industry were going to debate the role of robotics in industry, how it may displace even more jobs than originally imagined, but that new careers were being created in robotics, computers, and repairs as we have discussed in the past.
Excelsior, The banks in Canada have started using robo advisors instead of financial consultants, but there is another interesting development if they bring in a flat tax say 10 to 12%, they won’t need accountants or The CRA in Canada and The IRS in The US. There won’t be any loopholes to take advantage of anymore, but this is much more profitable because computers are better at number crunching and math than humans.
Excelsior robo advisors are not emotional, they stick to the facts and that sort of clear thinking appeals to most people who aren’t interested in financial matters.
I’ve known a few people that had the personalities of robo advisors. Now I’m wondering if they were human at all.
BTW – What would we ever do in a world without accountants?
Sorry Cory, better clean up your resume soon. ๐
THE best funny .ever………….clawing for a cpa
Chartster…………….here is one for you…POLITICAL NEWS
TED CRUZ’S wife works as a director at GOLDMAN SAKERS…..per Marty Armstrong.
She’s worked with the CFR as well.. And we all know the corruption with that group.. Ted and Heidi met while working on the Bush campaign. And that means Teddy is a complete insider and should not be elected. ! ! :
Thanks for the info………I knew there was a reason I did not like the guy…….
btw………..you da man…………..ccf
Marty Armstrong………………Dow to 32,000…..because the govt bonds are not worth investing in.
I am beginning to like Marty Armstrong………….CCF
Uh-oh your losing your Contrarian’s Contrarian approach ๐
While MA & (Socrates) made some good calls, he’s also made many wrong calls, and is just another voice in the wilderness. He is a smart guy, and very good at marketing his own story (investor bucking the system, the creation of Socrates and his algo program, the jailed martyr, and the released and reformed investing guru) I definitely respect and consider his analysis, but just don’t understand why people fall for the hype and hero-worship with him.
I just had a weak moment…………lol……..see my comment below……
Just busting your NUGTs…..
Now you got me to look darn it…. Here’s the latest from M.A. (what would MA do?)
Market Talk โ January 28th, 2016
Posted on January 28, 2016 by Martin Armstrong
Next up…… Coverage of Harry Dent arm-wrestling Bo Polony…..followed by Cramer.
SKWL…!
( slapping knee with laughter )
๐
good one…………….
+++10,000,000
LOL…. That’s a good one..!
Ain’t gonna happen! 100%
๐ ……..I was getting ready to ask Matthew….what the dow/ gold ratio would look like ….
32,000 Dow , uh, no!
All kidding aside,….. ..I thought Marty’s comment on the reason,,,,,not the amount.
For a strong move in the dow going forward . His comment was that big money would be avoiding bonds and in particular any govt bonds…….
He also has developed his slingshot theory as part of the rationale. It is interesting that he mentions on the post above this slingshot will be starting in 2017.
Look at it this way guys. If there’s a currency crisis, the Dow just might PLUNGE to 32,000. That’s right, if the Dow were to double while gold went up 10 to 20 fold, it will have plunged 80% to 90% in real terms and the government would would still collect huge taxes on a gain that is really a catastrophic loss.
You can rest assured that gold would smoke the Dow if the Dow goes up due to a bond market collapse.
+1 Agreed about the Down plunging in real terms and that Gold would absolutely smoke it in real terms and purchasing power if the Down went up due to a bond market collapse.
I think treasuries are going to go up. Yield down, bond price up. But I ain’t buying them..
I tend to agree, and only trade using the ETFs: (TLT), (UBT), and the inverse (TBT) when I get a strong set-up for a buy or sell. Typically I’d rather have my funds working in better assets, but sometimes I park money temporarily in those ETFs if the set up looks right, and when I’m undecided on a particular stock or commodity I’m watching.
Chartster…….that is MA’s point…………he says the big money will not be buying either…..and that is the reason the DOW is headed higher..
It’s the bond bubble bursting scenario….. Yes, very likely at one point in time, but I think he has targeted 2017 as the year of the slingshot.
I going with the buckshot in 2017
Ha! By 2017 I’ll be all in with resource stocks and energy, but as discussed yesterday, that is a bit too far out to plan for at this point. Really I cross each bridge as we get to them, and there is a great deal of change in the world economies at present.
For now I’m just trying to figure out my strategy for the next few months.
FFM….Das BOOT,
As a follow up to our Pt/Pd discussions, have you noticed them starting to gradually recover? For example, I finally got my escape hatch from Stillwaterfall today ๐
I had averaged down to a $5.86 cost basis and trimmed some today at $6.65 (didn’t want to risk the extra penny), and held a small position in case it keeps climbing. It is at $6.75 now.
FFM,
If you believe the dollar would be at zero to maybe .40? Then the goofy MA theory might come into play. But, the MA theory is hog wash…
Chartster, the dollar does not have to fall at all relative to other currencies in order to lose huge purchasing power in real life. If those currencies are in worse shape, the dollar will rise against them but that does not mean it will not go down in purchasing power at the store.
The USDX is currently trading at the same level it traded at in 1987 yet the dollar in your pocket buys a lot less of just about everything. So the USDX is not a good measure of the dollar’s real value.
I agree with everything you just said.
..so..? We might see a paradigm shift?
I guess I misunderstood your first sentence. My point is simply that the USDX would not have to go anywhere near 40 for the Dow to go to 32,000.
Nether have anything to do with each other. And that’s what fiat is all about. There is zero correlation. Even though people “think” there is..
THANKS FOR THE VIEW POINT…………….Chartster and Matthew…………..the claw
Yes, MA is goofy! In case you were wondering.
got ya……………ccf
BOJ Negative interest rates. Wow
Now that is ……..GOOFY
….and it tortured the Yen today.
set the estimates low enough and meet or exceed the low estimate and excitement abounds.