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Balancing A Pullback In US Markets And PMs At The Same Time

Cory
February 28, 2019

Doc is back today to update us on a scenario where the precious metals and US markets head down together. With both slowly rolling over in the past couple days right at resistance the rare correlational between stocks and gold could be here for a little while. It is very interesting to see a lot of the hard core bulls disappointed on the overall sector.

Discussion
51 Comments
    Feb 28, 2019 28:25 PM

    Doc what do your charts say about gdx pullback, what is your downside target? Will it fall below 20. Thanks

      Feb 28, 2019 28:08 PM

      Paul, over the next 3-4 months, I could see GDX fall to between 19-20. Hopefully, it holds there. If it does, I’ll at that time have a better idea what it should do next.

    Feb 28, 2019 28:41 PM

    Good to hear Doc’s positive comments on PMs. Don’t know if I agree though with the statement that trump has Powell in his back pocket. I guess I’m in the school that Powell really doesn’t have a game plan other than that shown by the previous three Chair people. They’re in too deep and they have no more of an idea how this will work out than anyone else. Trump is just another side-liner. JMO

      Mar 01, 2019 01:16 AM

      Agreed Silverdollar. The previous Fed chairs from Greenspan, to Bernanke, to Yellen have been flying by the seat of their pants in a monetary experiment, and most give them too much importance or credit for having fumbled their way through this experiment and Powell is no different. People believe that because we didn’t see runaway inflation when Helicopter Ben showed up or when they did QE1 QE2 Operation Twist, etc…. that this means everything worked out fine. It didn’t and the same systematic issues are still bubbling up under the surface that were there in the 2007-2009 period. People think 2008 was a isolated crash but it’s long behind us in the rear-view mirror, but it was simply the first wave of several that will come crashing up on the financial shore.

      The increase in money supply didn’t cause inflation (yet) because the banks mopped it all up to square away their balance sheets, and they didn’t do what was intended by loaning it out to small business owners and entrepreneurs.

      Instead huge firms and funds borrowed at next to nothing to dump money into the stock market, and this encouraged large corporations to do the same thing and borrow at near zero and buy back their own stock. As a result the money supply didn’t circulate as normal, but the inflation instead went into financial assets and the stock market, or collectibles and rare art.

      There wasn’t real value and new business created out of it, but rather a goosed market for the shorter term, and it’s been quite a ride in the general markets. Large publicly traded companies weren’t investing in future growth, but buying back shares to boost their officers stock options value and give the markets a higher valuation, as capital reinvestment stagnated.

      When the next wave hits, Powell will be just as clueless how to deal with at the prior 3 Fed bobbleheads, and they’ll continue the same dot plot madness and same old tricks, but eventually the derivative market gyrations will implode and nobody will be able to put humpty dumpty back together again or pull the strings of the banking elites.

      http://www.freakingnews.com/pictures/112000/Alan-Greenspan-Hiding-Behind-Bernanke-and-Yellen-Masks–112422.jpg

        Mar 01, 2019 01:18 AM

        Greenspan dex…with the expandable brief case , with all the magic trick books…CNBC promoted….keeping the sheeple glued to the TV trading desks, while the suckers got fleeced by the Dot Comic Bubble promoters….

    Feb 28, 2019 28:04 PM

    Trump has Powell in his back pocket……….really……..The cabal, has everyone in their back pocket book…………..LOL

      Feb 28, 2019 28:06 PM

      Powell dose not need a game plan……….the plan has been in place for 100 yrs….Wake up you guys…..

        Mar 01, 2019 01:22 AM

        Agreed. Powell is not in Trump’s back pocket, but merely the banking cabal’s back pocket and they could care less about Trump, who is merely in his Zionist handlers back pocket.

        People give these guys way too much credit for being autonomous free thinkers, when in fact they’re the puppets on the string.

        The banking elites have controlled things in the background for a long time, and they aren’t nationalists worried about kings or queens, presidents or dictators, and their globalist agenda scoffs as the silly melodrama of countries and their political theater. They pull the strings, finance both sides of wars (just like grampa Prescott Bush did) and Central Bankers are merely their underlings and short-term political leaders are the equivalent of the dude shaking the signs on the street in front of a business.

          Mar 01, 2019 01:11 AM

          Ditto………and well said…….exactly.
          I do not understand how so many in the PM market, have not done their homework, and keep babbling like some kind of expert, on all monetary policy,….. It is just a big joke on the sheeple. …Congress, is ran by a bunch of idiots, the Fake Fed show of the Select Committees on Finance, ran by Maxie Waters ,who did not know the Fed was not Federal a few years ago. I have decided these idiots have been placed in office by the cabal, ….by fake ballots voting…….It is seriously just a freaking joke……Cummings is no different.
          And AOC….Cortez for the really dumb……..The Three Ring Circus for the Lame Brains.
          My Morning Rant………………OOTB.

            Mar 01, 2019 01:44 AM

            Good comments OOTB and Excelsior. I agree with most.

            The one thing that people are missing about what’s happening with the NWO elite-vs- the nationalist or populist agenda leaders. Trump, Putin and Ping and many other global partners are going to dismantle the cabal. In fact, it’s happening right in front of you now.
            You see it happening by unwinding the wars everywhere. The families that started all the wars are going down. It’s easy to see it happening right in front of you.

            These people that think the fed is still in control are lost (can’t follow the bouncing ball at all..)

            Mar 01, 2019 01:54 AM

            I’m all for breaking up the crony banking cabals, but just don’t see it happening at present, and just have less confidence in the Trump/Putin/Ping ring, and see them as mere pawns on the chessboard.

            The globalist plans have been for a long time the “Green Mask” using the Agenda 21 and Agenda 2030 as the charade to tighten their grip on the globe (under the guise of saving the planet). The concern is that the pushback from Trump/Putin/Ping ring of fire, will be a clueless sheeple wanting the opposite and welcoming in Socialism, Central Global planning, and some variation of the Paris Agreement & Green New Deal / “Green Dream” all paid for by a global currency.

            It looks like the globalist have the perfect distraction going on right now that will end in a few years, and that is when the pendulum will swing back from Nationalist/Protectionalisit/Mercantilist to a spread eagle embrace of Socialist Globalist Nanny State love.

            This is just the pause before the storm, not the end of their regime.

            Mar 01, 2019 01:00 AM

            Chartster……..thanks…….I am going to pay more attention to the TPP….Trump Putin Ping
            Russia collusion….by the deep state using the dim whits to run a circus show continuously on evening news.( I have turned off the TV of madness). There is no there there….what a show.

            Mar 01, 2019 01:02 AM

            If we were going to war, it already would have happened.

            If Trump was their buddy, we would have more regulation, higher taxes, we’d been in the TTP, we’d be in the climate accords, we’d still be in NAFTA.
            The UN agenda is toast in the US, and that’s because of Trump and the patriots. And the fed is cooked. (you’ll see that soon)

            Mar 01, 2019 01:05 AM

            Oops, TPP not TTP

          GH
          Mar 01, 2019 01:24 AM

          ‘Soon’…would you care to put any falsifiable parameters on your prognosis? Any time frame?

            Mar 01, 2019 01:47 AM

            Lots of changes (good ones) coming from now to July in the financial and legal arena.
            I wish I has specific time frames, but don’t.

      Feb 28, 2019 28:27 PM

      That’s right, Jerry. It’s the reverse. All presidents are in the pocket of the Fed.

        Feb 28, 2019 28:00 PM

        It has become laughable , that so called educated adults are so blinded, that they can not see or understand the FAKE FED, ….with all the available history that has been posted for the last 12 yrs. on this site…..Just UNBELIEVABLE …..

    Feb 28, 2019 28:22 PM

    You guys pay too much attention of a month end close……Feb is a short month…..
    Two days short of 30 day average…….just saying……Let’s see what Monday has to say…
    or Tuesday……I bet we are UP………JMO…..MWAG
    Gold is doing fine……..up over the long term……slow and steady……
    I bet we see 9% return YOY.

      Feb 28, 2019 28:30 PM

      Gold finished the month on a weak note but it wasn’t enough to undo the first monthly MACD buy signal in three years.

        Feb 28, 2019 28:33 PM

        Gold had a four month streak of higher monthly closes for the first time since 2012. The last time we saw five was in 2010.

      Mar 01, 2019 01:32 AM

      Looking at Monthly charts is good for figuring out longer term trends and which part of the cyclical bull and eventually secular bull we are part of, but I agree that they can miss many of the shorter duration buy/sell signals on the weekly, daily, hourly charts.

      There are different types of investors, and those buying and holding to play long time horizons should focus on the weekly and monthly charts. However 50 month and 200 month averages are waaaaaaay too long to offer much valuable insight in the day to day and week to week movements in many of the companies shorter-duration traders focus on in ANY market.

      I mostly watch the weekly for trend confirmation, but ultimately drill down in the weekly and hourly charts when I’m swing-trading resource stocks and while they are noise to long-term traders, their monthly charts are like investing year books of days gone by for shorter term traders.

      Each style has it’s pluses and minuses and all investors use different tools and strategies and systems, and many can work if people work them. Bond traders, Currency traders, index and value investors, options traders, day traders, swing traders, technical analysist, fundamental analysts, dividend hoarders, private placement pirates, etc…. etc…..

      There are many games to play in the market casino (Craps, Roulette, Black Jack, Poker, Slots, Keno, Baccarat, Horse Racing…..) and there are statistical odds, luck/chance, and epic runs & wipeouts in each one of them.

      Wishing everyone well in the investing style of their choice and may the good folks on the KER have a prosperous 2019.

        Mar 01, 2019 01:37 AM

        That should have said:

        “I mostly watch the weekly for trend confirmation, but ultimately drill down in the [Daily] and hourly charts when I’m swing-trading resource stocks and while they are noise to long-term traders, their monthly charts are like investing year books of days gone by for shorter term traders.”

        Keep in mind that a 50 month moving average is over 4 years, and a 200 month moving average is over 16 years. Good grief! Opportunities in all kinds of sectors pop and drop, and rally and crash for great trading, within those time frames that wouldn’t show as much more than blips on long term monthly charts. Sometimes short-term traders can’t see the forest through the trees, but sometimes longer term traders can’t see the forest because they are up orbiting the planet from too far away.

          Mar 01, 2019 01:25 AM

          Ha, ha…….good one….. ” but sometimes longer term traders can’t see the forest because they are up orbiting the planet from too far away.”…….guilty as charged…. 🙂

        Mar 01, 2019 01:45 AM

        Superb comments to keep in mind when viewing long term charts! Perspective, Perspective, Perspective!

        Mar 01, 2019 01:32 AM

        The monthly chart is actually very important as it underpins the longest, strongest moves. The huge gold sector moves of 2016 came on both weekly and monthly chart buy signals. So a new buy (or sell) on the monthly chart matters even in the short term.

        Assuming we don’t want to miss large chunks of the beginnings and ends of moves, the mistake is when people rely primarily on the monthly chart for their signals. Every move starts on the “smallest” chart and the buy signals fall like dominoes up to the long term charts.

        However, if one wants to simplify their life and avoid being too active in the markets, for whatever reason, then entering and exiting a trend based only on the monthly chart makes more sense. This will keep you aligned with the biggest money flows and makes riding a long trend less tricky.

        Everything “monthly” matters a lot because the action on the lesser charts is always strongest when it is confirmed/in alignment with the monthly chart. So even the 50 and 200 month MAs matter great deal as they should be close together and pointing up if you’re looking for a powerful new bull move warrants aggressive action. We have such a situation developing now and if the bulls “win” March then bears are in for a surprise this spring.

          Mar 01, 2019 01:36 AM

          Typo: “…if you’re looking for a powerful new bull move *that* warrants aggressive action.

          Mar 01, 2019 01:44 AM

          Great comments……Matthew and Ex……

    BDC
    Feb 28, 2019 28:27 PM

    Thanks Doc.
    Good, solid analysis.
    As usual.

      Feb 28, 2019 28:02 PM

      Yeah, no contrary indicator here…
      http://schrts.co/itfaQrjN

        BDC
        Mar 01, 2019 01:17 AM

        lol… Charred pot calling Sterling Silver black.

          Mar 01, 2019 01:24 PM

          Of course you’d see it that way, you think your national socialism is good and moral, after all. Detail is obviously not a strong suit.

            BDC
            Mar 01, 2019 01:03 PM

            Doc understands that the first order of business is protecting the base, and that in so doing profit will be forthcoming. Every one of his comments has been geared toward alerting folks to downside risk. Upside will come, if capital is preserved and ‘seeds’ are sown. The best test for truth is time, and Doc obviously has plenty of experience.

            As for “national socialism”, such is best suited for the homogeneous racial polity; and even within that, friction born of greed and avarice too often prevails.

            I am a White Aryan Socialist whose base is the productive Family and extended Family, where private ownership and public works are combined for the good of all. That is, where free enterprise for OUR OWN folk is enabled to flourish. In other words, Natural.

            Other racial/ethnic peoples are encouraged to emulate this.

            Mar 01, 2019 01:00 PM

            -There are much better ways to “protect the base” than staying avoiding strong uptrends.

            -Socialism in all of its forms runs on force and theft backed by the threat of violence and is therefore criminal. It is also a recipe for economic disaster. This truth has been thoroughly tested and thoroughly confirmed.

            Mar 01, 2019 01:26 PM

            See the blue arrow on the following chart? That’s where Doc was calling for 1200-1210 gold. Such a move would have meant dropping $30-$40 back below the 600 week MA after gold had just spent four months fighting to get it back. Experience should have told him that this was unlikely based on “the technicals” and would have been very bearish if it had happened. Yet the call was made nonchalantly as if it would not have been a big deal against the bullish case. Experience should have also made it obvious that the action following that date warranted at least some bullishness but that’s not what we got. It was the same for all of 2016 -during the biggest rise for the miners in decades.

            It’s one thing to be wrong and quite another to pretend one’s been “bang-on” for the last 5 years.
            http://schrts.co/jQVvkyMu

    Feb 28, 2019 28:18 PM

    The daily and weekly chart for gold looks pretty bad. If gold gets hit tomorrow (which is highly likely) and next week starts more downside, the momentum will build on its self. It won’t be pretty.

    The Bulls want gold to hold right here.

      Feb 28, 2019 28:49 PM

      It is unlikely to hold right here but that doesn’t matter much except in the short term.

      Gold rose to clear and important resistance in a bullish manner and now just needs a break. That 30 week MA is a long way down but 1280 is probably the worst case.
      http://schrts.co/xkCanbAW

    Feb 28, 2019 28:54 PM

    Is WOOD no good after this week’s big, bearish engulfing candle? Probably…
    http://schrts.co/BDivYqSM

    Mar 01, 2019 01:00 AM

    A bad week for gold and silver. Not a surprise though when one considers the strength witnessed over the last few months. Some near term damage could be inflicted on the charts if the metals continue to slide into the weekend. Not looking great!

    Mar 01, 2019 01:02 AM

    REALIST NEWS – Monsanto’s Roundup Weed Killer Found In Top Beer And Wine Brand

    https://www.youtube.com/watch?v=Syhc9sVtvk0

    Mar 01, 2019 01:09 AM
      Mar 01, 2019 01:42 AM

      Agreed.

        GH
        Mar 01, 2019 01:31 AM

        Dear me, how will lefties handle the cognitive dissonance?

        Long ‘safe spaces’, crayons, and puppies.

      Mar 01, 2019 01:57 AM

      I disagree. “Little twit” is what she was while bar tending and sh*ting in her customers’ ears. Now that she can force her little twit ideas on innocent people, she’s graduated to big twat.

    Mar 01, 2019 01:58 AM

    key reversal day on usa equity indices…..enough weak fundamental news to turn back /es at ket 2800ish resistance…Could we retest or break the December 2018 lows?

    Mar 04, 2019 04:02 AM

    key reversal day off a high with volume at stiff resistance…First target the B point of ABC down is around 2706 Tas Daily support level…It was set up perfect and the obligatory news came along with new construction at recession levels…good trading!