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Doc is not sure that “This Too Shall Pass”, at least not quickly.

Big Al
June 27, 2016

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Discussion
21 Comments
    CFS
    Jun 27, 2016 27:32 AM

    I agree more with the Doc, than you, Big Al.
    Combines a good sense of fundamentals with his chartist timing.

    CFS
    Jun 27, 2016 27:41 AM

    One extra thought.
    The game is often played by the big boys with such leverage nowadays, I suspect a number of hedge funds are walking dead….. We just don’t know it yet.

    Jun 27, 2016 27:44 AM

    I think Doc’s take on markets is more sensible then “it will pass”. Everything passes, except death which is somewhat permanent. The depression passed; WW11 passed, Vietnam passed, the housing crash passed, etc. However, there was always far reaching turmoil effecting markets. With Brexit, we’ve never been here before so no one knows the ramifications…..but there will be many. Just the fact that others may join the British in their exit will be big.
    On the conventionals, we’ve been in this bull for 7-8 years. That’s long in the tooth. Earnings are stagnating along with incomes of the consumers. Every garage I see is full of ‘stuff’ that no one needs or will replace. Elections this year will be the weirdest for many years. Problem banks are everywhere and the worst is that nobody, repeat nobody knows how to handle the World debt problem. To think our markets are immune to a downturn is an expression of hope, not fact. I wouldn’t touch this market in it’s present state.

    Jun 27, 2016 27:45 AM

    Doc, I agree with your TA/assessment for the conventional markets.
    Al, I agree the fundamentals will prevail. However, the fundamentals of falsified stocks means the conventional markets are cooked. Just like their books, cooked!
    The chickens are coming home to roost.

    CFS
    Jun 27, 2016 27:55 AM

    One further thought.

    Most investing is long.

    In a. Leveraged market, a falling market trend tends to be self-sustaining because of margin calls.

    AJ
    Jun 27, 2016 27:18 AM

    For some light relief, John Oliver’s rant on Brexit
    http://www.vox.com/2016/6/27/12038972/john-oliver-brexit-last-week-tonight

      CFS
      Jun 27, 2016 27:45 AM

      John Oliver is an obscene socialist rabble-rouser.
      But an excellent example of an appeal to the lowest common denominator.
      The word trash comes to mind.

    Jun 27, 2016 27:44 AM

    Doc,

    Do you recommend shorting metal stocks? I’m particularly interested in EGO, HL.

    Also, what do you think of oil stocks at this point? Usually sharp fall like produces a bounce of some short.

    Thank you!

      Jun 27, 2016 27:56 AM

      Cali, I’m not shorting them although I feel a number of them will correct—I’m now in this thing long term and will add on dips. I’ll just have to endure the ups and downs for awhile—in a sense I am hedging my position by going short gold. I just don’t want to get whipsawed here. I have finally taken some longs in some oil stocks and will watch the technicals on those—I’m willing to sell those if the technicals start to look worrisome.

        Jun 27, 2016 27:21 PM

        Thanks Doc. I initiated a small long position today with BBG.

          Jun 27, 2016 27:32 PM

          Cali, not investment advice but BBG looks like it has further to fall. It might get some support at its’ 200 day SMA at about 5.50. Once that happens let me know and I’ll look at it again.

            Jun 27, 2016 27:51 PM

            I have a small position in BBG. If it drops more, I will average it down. Weekly RSI is showing severely oversold – I’m looking for a small bounce.
            I like BBG, good cash on the balance sheet and it perks up when oil moves even slightly higher.

      Jun 27, 2016 27:36 PM

      Thanks for alerting me to this stock—I’ll have to look more closely at the fundamentals.

    Jun 27, 2016 27:59 AM

    It’s time we clear the air

    We are at one of the most important pivotal moments in history and we all need to be very well informed.

    Doc, you missed the entire gold move up, now you are short, and you, like many, are digging your heels in to sink gold.

    Anyone who listens quite frankly could get slaughtered.

    This declare the odds that gold could be much lower from these levels, is frankly, insane.

    This bot not business as usual. This is not this too shall pass.

    If the dominos start falling this thing can take it all down.

    I sense an agenda here

    People, go with your gut!

    Go with what makes sense to you!

      Jun 27, 2016 27:19 PM

      James, I would respectfully disagree—I’ve been purchasing PM stocks since November of last year and am about 42% invested. I also called the move in gold in January but did not expect as great a run as we’ve had. I really don’t care at this point in time what gold does as long as I get the PM stocks right. If you remember I was touting Claude and Richmont before any of them started to move and when hardly anyone was bullish. I also have mentioned that we’re in a long term bull market for gold (continuously) and have said the odds are good that the December low is the low although we won’t know until the end of this year—could the gold continue here without a correction—absolutely. However, I’ll be cautious here since the stocks have not run with this move up and could be signalling a correction—I’ll take that bet until the TA tells me otherwise since if it does continue, I’ll benefit from my stock position. I’ll be able to move from my shorts with minimal loss.

    Jun 27, 2016 27:08 PM

    Doc,
    What are the probability(based on your technicals) that we could se crude oil,WTI at 35,second week of august?

      Jun 27, 2016 27:25 PM

      Pete, I would say both the daily and weekly charts are portending a roll over in oil. Getting to 35 by August is possible but the shape of the weekly MACD is saying right now it’s not likely—40 though is very likely. If the MACD steepens your odds will increase.

        Jun 27, 2016 27:13 PM

        Thank you,Doc.

    Tom
    Jun 27, 2016 27:09 PM

    Very low interest rates out there, Construction is booming, Private Placement and other private equity transactions at an all time high, no real asset bubbles exist, and an election year to boot. I’d say buying opportunity in equities this week.

    Jun 27, 2016 27:10 PM

    Soros got his long bet on the Pound wrong, so I’m thinking that the EU referendum was a devaluation to bring both the Euro and the Pound in line with the Dollar.

    But this also makes me think that this requires a low volatility gold price as a benchmark.