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We start Tuesday with Gary Savage

Big Al
October 27, 2015

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Natural Gas is currrently trading a bit above $2 per mcf at $2.10. Gary feels that this one is worth looking at.

Gold remains resilient trading up about $0.90 at $1167 per ounce.

Some of our technicians disagree with me, but I still believe that now is not a bad time to accumulate gold and, even, silver.

 

Discussion
119 Comments
    Oct 27, 2015 27:22 AM

    IS THIS …….OPTION DAY………….

    Oct 27, 2015 27:25 AM

    Chinese war ships to dock in FLORIDA PORTS…………see zerohedge and jdsmineset
    scheduled to dock……….NOV 3 NOV 5.

      bb
      Oct 27, 2015 27:30 AM

      I read that Frank, odd stuff, the Americans just sent a warship thru Chinese waters.
      China calls American ambassador to Bejing? to protest.

        Oct 27, 2015 27:38 AM

        bb…..what is the docking about……………

          bb
          Oct 27, 2015 27:40 AM

          No idea, havnt found anyone with information or even an opinion yet.

          Oct 27, 2015 27:40 AM

          I am not sure it is OLD STUFF…………

            bb
            Oct 27, 2015 27:58 AM

            ODD STUFF, but talk has been going on about it for a few days, the americans finally sent their ship which is why its news today.

            Oct 27, 2015 27:02 AM

            No talk on this site…………..seem to be a bunch of slow polks……………..

            Oct 27, 2015 27:04 AM

            So, the Americans are going to dock in the new Chinese docks, and the Chinese are going to go fishing in FLORIDA…..that should make GATOR real happy……….lol

            bb
            Oct 27, 2015 27:10 AM

            The americans docking at a Chinese port is possible I guess, would have to wonder at the Chinese protest tho.

            A lot of news is not discussed here, why should it really? Gold hasn’t been affected by news for awhile now.

            Oct 27, 2015 27:12 AM

            bb…..THIS is not a DEBATE……just seems to be IMPORTANT INFO. which is forward looking……

            bb
            Oct 27, 2015 27:16 AM

            Frank, I wasn’t debating, where you?
            What had you thinking it was a debate?

            Oct 27, 2015 27:17 AM

            AT some point in time…..the NEWS will be important , and a lot of sheeple will be sorry the warning signs were there, but, to dang lazy to see , hear, and act.

            Oct 27, 2015 27:35 AM

            And, maybe not wanting to admit!

            Oct 27, 2015 27:19 AM

            Just wanted to clarify, prior to starting any debate….communicating in type, is sometimes difficult……..No problem…just info. passing………….ootb

            bb
            Oct 27, 2015 27:28 AM

            Human nature Frank.
            I don’t think this “sheeple” stuff is as big a deal as its made out to be.
            Besides, when was the last time you read anyone here doing anything about anything? Maybe help a person or small group of people but anything that has some king of effect?
            Don’t believe so. Maybe everybody is “sheeple”.

            Oct 27, 2015 27:03 PM

            bb……….sorry for the correction on ODD AND OLD…….I just saw the difference , I put my other GLASSES ON…..sorry for the misunderstand….

        Oct 27, 2015 27:58 AM

        BB

        It isn’t odd when one realizes that the United States, Russia, China, etc. were all created by (built up into superpowers) by the same New Age crackpots. These same superpowers are going to be pitted against one another (all by design) to help usher in a one world government that the masses will be begging for after all the bloodshed.

          Oct 27, 2015 27:08 PM

          That is the long range globalist plan for sure Bentnail. The David Rockefeller organizations of the Council on Foreign Relations and Trilateral Commission have a one world government/one currency agenda and have been very open this is the plan. They move their puppet leaders and military forces around the global chessboard to great the (Problem/Reaction/Solution) in their favor.

          The same thing will happen with the currencies, as this is the plan as well. Make the currency values so Problematic, that there is an outcry from the people to “do something” (Reaction), and then they wheel in their powerpoint presentation on why a Global currency would be more “Fair” to all nations. Debt will be forgiven in a Jubilee and Wolf in Sheeps clothing (UN/G20/G8) will be happy to make it a happy and peachy one world system.

          Fun times!

            Oct 27, 2015 27:10 PM

            Debt forgiveness is just code for a lot of other people not getting paid back what they invested. We need only wonder who will pay the price that allows others to escape their payment schedules.

            Oct 27, 2015 27:26 PM

            Agreed. It blows my mind that people think that there won’t be repercussions from debt forgiveness. Someone didn’t get paid back, and that has a ripple effect.

            At the current debt levels of many nations on the globe, the math doesn’t support the debt getting paid back (especially at the rate it is growing). If interest rates ever do increase, it will be a big mess.

            The only way nations like Japan or the US or Euroland and now even China have found to deal with it is attempting to inflate their way out of it, but everyone is just treading water. The debt bubble and currency depreciation will come home to roost eventually, but my concern is that this will be the moment when the globalists push for a single basket of currencies, which would transition over to single global currency eventually.

            Maybe this is just the way things just need to play out, but it is a big part of why I first became interested in “stuff” (PMs, base metals, Oil/Gas, Uraninum, specialty metals, fertilizers, soft commodities, real estate, etc…). I’m not sure exactly what they’ll all be worth in that kind of environment, but they should be at least worth something. (money, energy, food, land/buildings). It’s an interesting time to be alive…..

            Oct 27, 2015 27:48 PM

            When you start using that word “interesting” I start getting very nervous, Shad!

        Oct 27, 2015 27:59 PM

        BB

        Everything is going to be alright!!!

        https://m.youtube.com/watch?v=zGYYRr6DOSo

          Oct 27, 2015 27:10 PM

          Absolutely Hilarious Bentnail.

          Oct 27, 2015 27:14 PM

          Where did you find that, Bentnail?

            Oct 27, 2015 27:07 PM

            BIG AL

            I remember watching that on “American Inventor” when it was on television. It was beyond bizarre in my opinion. Something made me think of the video today and I thought it would be fun to share it with all of you fine folks.

        Oct 28, 2015 28:38 AM

        According what I read in a chinese site, US and China are making a show out of this. BOTH countries have no desire to start a war. US has to show some thing for Chinese action but it is so publicized and announced way in advance to have any surprise factor. They also must be talking underneath the table, let me pass and nothing will happen. China will cooperate. US get the face value and china gets the real thing. Both are happy. Both got what they want most so it may turn out to be non-event. This has been the way last two decades.

    bb
    Oct 27, 2015 27:28 AM

    Think I read the other day 51% of American workers earn 30k or less.

      Oct 27, 2015 27:41 AM

      Amazing….how can anyone save and invest at those levels?

    Oct 27, 2015 27:47 AM

    Gary, you’ve been spot on for many moons regarding the conventional markets. It looks like they are about to roll over and get hit. There might be some kind of QE coming, but it’s not going into the conventional stocks IMO.
    Also, look at the gold chart. When the 50 DMA crosses above the 100 DMA with strength, it usually results in a waterfall decline. I do believe that is coming.

      Oct 27, 2015 27:53 AM

      but– when is it coming…
      as for china/us— all blunder & bluster… drama

      Oct 27, 2015 27:08 AM

      “When the 50 DMA crosses above the 100 DMA with strength, it usually results in a waterfall decline.”

      Thats because the bear market rally was coming to an end. I’m starting to lean in the camp that says the metals are no longer in a bear market.

      Oct 27, 2015 27:10 AM

      I’m not sure why you think the stock market is about to roll over. This has been an exceptionally pwerful rally that has broken right through every resistance level like a hot knife through butter. That smells like QE has already begun to me.

        Oct 27, 2015 27:20 AM

        Gary-
        The internal components look horrible. Secondly, 5YR rates are 1.35% with SPX around 2060. The last time SPX was 2060, 5YR rates were in the 1.8% range. It looks like the 5YR wants to visit 1%.
        You are right, there has been strong momentum behind this move cutting through resistance; however, a 3 day plunge typically creates a vacuum to the upside on a bounce. Obviously, the market has to decline down through 2045 and 2020 to discuss bearish moves.

        Oct 27, 2015 27:27 AM

        There is a major disconnect between energy stocks and oil. If Gary is right on the oil cycle, then that would explain the overvaluation of energy stocks; however, if this is not the case, the energy sector has a lot further to fall.

          Oct 27, 2015 27:11 PM

          Chris Temple had some interesting commentary on that today. I tend to agree Richard.

            Oct 27, 2015 27:10 PM

            Chris is one sharp guy!

            Oct 27, 2015 27:13 PM

            Agree 100%. I always said he was brilliant and he has not let us down.

          Oct 27, 2015 27:03 PM

          Energy stocks are actually under-peforming compared to how they did months ago. When XOP was about $54, oil was also about the same price. Now with oil at 43.25, XOP is $35. It has fallen from $56.

            Oct 27, 2015 27:21 PM

            Paul, I’d be curious to get your mid range views on how the ETFs like OIH, XLE, DIG, XOP, etc… will perform relative to the spot price of oil. Do you sense a decoupling in the stocks relative to the spot price?

            The spot price of Oil and the equities that follow the oil markets seem like 2 different markets at present, and your post made me think about asking you for your thoughts since you follow it rather closely. We had some thoughts on around Oil on the Chris Temple editorial today if you want to weigh any on any of the discussion.

            Cheers!

    Oct 27, 2015 27:51 AM

    The stock market rally is almost identical to the rally from one year ago, with the exception of a new high. The FOMC minutes are not posted until 11/18, so the only information will be whether they hike rates or not. To me, it appears that rates are heading lower.

    Oct 27, 2015 27:53 AM

    Paint drying is funner than these markets..something is happening behind the scenes…almost like an ‘strange” silence before a BOOM……of significant magnitude….fwiw

      Oct 27, 2015 27:57 AM

      Check out my note above…………CHINESE WAR SHIPS TO DOCK IN FLORIDA….might want to check into this……………..just saying…………………ootb

        Oct 27, 2015 27:48 AM

        I READ YOUR COMMENTS ABOVE, and yes it’s the TOP STORY on CCTV NEWS, China Central Television News, it’s getting quite serious from their point of view, tune in to that channel at the top of the hour……..American news channels are poo, pooing the story!

          bb
          Oct 27, 2015 27:51 AM

          Well Mark, might be wise to have a good bottle of your favorite a few J.s and your favorite girl around for awhile.

          Heck, maybe put some money on the Cubs to win it all too.

            Oct 27, 2015 27:34 AM

            Really great to see them in the Series!

            I saw them play at their ballpark a couple of years ago and, let me tell you, it was really great!

          Oct 27, 2015 27:54 AM

          thanks for the comment MARK………….appreciate……THE NORTH AMERICAN SHEEPLE are asleep at the switch.

            Oct 27, 2015 27:14 AM

            YUP…………..they don’t know or want to know anything!

            Oct 27, 2015 27:51 PM

            More interested in Blue Jays……and bird watching…………..lol

            Oct 27, 2015 27:14 PM

            Chirp chirp.

        Oct 27, 2015 27:02 PM

        FFM…time to take down the outriggers and install the 50 cal on the bow….no talk on the docks as yet regarding the Chinese ships…guess they don’t monitor KER….

          Oct 27, 2015 27:06 PM

          Gator………if you get lucky maybe you can sell some swamp ground to those CHINESE SAILOR…….

          Oct 27, 2015 27:07 PM

          Let me know if you need any ammo………there are some good old boys just up the street…

            Oct 27, 2015 27:12 PM

            Had an interesting discussion at our Discussion Group last Friday. Know who percentage have conceal and carry permits. The answer is by far the majority. And, this is a very sophisticated group.

          Oct 27, 2015 27:10 PM

          Need to find out which port they are thinking of landing in……TAMPA, would be interesting. TYPE a note to Kerry Lutz..at FSN.

            Oct 27, 2015 27:55 PM

            FFM..I’ve got a coast guard buddy stationed at Tampa..we’re going out of John’s Pass this week end for grouper if the weather holds..maybe we’ll see a Chinese Junk…

            Oct 27, 2015 27:57 PM

            Gator, the Ships are going to Mayport Naval….over at Jacksonville…..

            Oct 27, 2015 27:59 PM

            Have a great trip…..hope you catch a bunch…..

    Oct 27, 2015 27:07 AM

    Congress……wants more money for the military in the new budget………

    bb
    Oct 27, 2015 27:36 AM

    The neo cons always want more money for war. nutin new there.

    What is new, is the reason those whales died on the west coast is trickling out.
    They died of starvation, they were krill eaters.
    Fukashima was killing herring months ago, its working its way up the food chain.

    Oct 27, 2015 27:32 AM

    ****** HERE’S ONE FOR EVERYONE……have anyone noticed how most Americans are so moody and angry these days………….seems like so many are stressed out and on the edge!

      Oct 27, 2015 27:35 AM

      ******* EVERYONE IS IN A HURRY……………no one cares about anybody else anymore………..it’s sad, very sad!

        Oct 27, 2015 27:52 PM

        Yes, I have and it is very unfortunate ……

        Oct 27, 2015 27:17 PM

        Not everyone does not care about others, Mark!

          Oct 27, 2015 27:16 PM

          Not everyone Mark. But yes, people seem stressed lately. Hard not too notice it.

      Oct 27, 2015 27:20 PM

      Have I ever, Mark!

    Oct 27, 2015 27:38 AM

    CHINA SOUTH SEA STORY on CCNEWS right now!

    Oct 27, 2015 27:40 AM

    CHINESE OFFICALS discussing U.S.WARSHIP right now!

    Oct 27, 2015 27:14 PM

    ****** WOW! AS REPORTED BY CCTV NEWS: US – CHINA situation getting more and more serious – china: u.s. violating china seas, us ambassador called in to explain!

      Oct 27, 2015 27:53 PM

      do not tell bb………….he has already heard it…………..lol

    Oct 27, 2015 27:21 PM

    Take a nice walk Mark…plant a fruit tree in the sun.

      Oct 27, 2015 27:31 PM

      ?……….?……..are you some kind of a troll?

        Oct 27, 2015 27:33 PM

        I’ve been to WAR already and it’s not fun……..real people die!

        Oct 27, 2015 27:54 PM

        Really rude……Agatha……..

          Oct 27, 2015 27:58 PM

          IT’S SAD…………..they think everything is joke!

    Oct 27, 2015 27:28 PM

    This will continue until the U.S pull out their bases and give back Asia to the Asians. Should take about 50 years.

    Oct 27, 2015 27:35 PM

    Spx has rallied right back to the “dome” top on the daily chart that has been forming over the last year. Would need to see the spx tag and then hold 2100 to put this pattern to rest.

      Oct 27, 2015 27:19 PM

      Agreed – Good thoughts spanky. Until the S&P can break above the dome pattern, then it still needs to prove we are not entering a new bear market.

      I’m keeping the door open for the blow off top Gary expects, but so far we are in limbo and would need to see some closes above 2077 and ideally 2100 if that were the case.

      Here is a good chart Brian posted recently, showing a similar Dome pattern in the DOW.

      http://goldtadise.com/wp-content/uploads/2015/10/dow1.png

        Oct 27, 2015 27:23 PM

        Interestingly, in the case of the DOW chart, it did take out the 17,100 level and broke out above the dome pattern, so maybe the S&P is just lagging and we will see new highs, but we need further data. The S&P is the benchmark I usually use over the DOW, NASDAQ, or Russell 2000.

          Oct 27, 2015 27:52 PM

          Any particular reason why you primarily use the S&P, Excelsior?

            Oct 27, 2015 27:24 PM

            I feel like it gets referenced the most in the health of the markets, most technical traders I like follow it (ie Avi Gilburt or Gary Wagner or Charles Nenner Research), and it contains many of the lunatic stocks. The Dow, Nasdaq, and Russell 2000 have their place in the health of different sectos (ie the Nasdaq is more tech oriented), the Down has many industry and blue chip stocks, and the Russell 2000 is the strength of the small caps companies), but the S&P is often the measuring stick of the market health.

            Oct 27, 2015 27:19 PM

            Interesting. I focus almost exclusively on the DOW. It gives me better information as a rule but exactly why I could not say.

            Oct 27, 2015 27:36 PM

            The Dow is definitely followed by many, and it may be the most widely followed….I mean there is a “Dow Theory” but not a “S&P Theory”. 🙂

            Many of the different sites I visit just track different things against the S&P, or they’ll price something else in the S&P etc…. I don’t see as many asset classes compared to the DOW or Nasdaq or NYSE or Russell 2000.

            I just tend to only have the bandwidth for so much, so I watch the S&P, but do cross check it’s percentage increase against the DOW to make sure it’s a trend. For the most part I block out the Nasdaq, but have friends that only watch the Nasdaq and are tech junkies. To each their own of course, and I own positions in some mutual funds and in my retirement 401K that has a little of them all.

            Oct 27, 2015 27:52 PM

            That’s my answer Shad. You hit it on the head. I don’t have the bandwidth to follow everything either so I stick to what I know and what works. There is just no time in a day. But I always appreciate the comments from guys like yourself who do follow the other index’s and keep me tuned in.

    Dan
    Oct 27, 2015 27:38 PM

    “Bubble phase” with collapsing credit, small caps, commodities and macro data. Okay Gary. I will keep obnoxiously pounding the table for a deflationary bust and market crash since I’m still 90% cash, 5% in silver and my options strategy costs me very little if I’m wrong.

    Every one else, including all the technicians and trend followers, are scared to call for a big bear market and loss of confidence in central banks.

    Oct 27, 2015 27:10 PM

    All the experts in the media are again very negative on oil calling for $35 and some fools calling for $20. This is probably time for oil to rally just like last time.

      Oct 27, 2015 27:22 PM

      Really? I don’t listen to them anymore but no big surprise. They will all be wrong as usual!

    Oct 27, 2015 27:15 PM

    Ferrari (race) stock is again down over 2% for the 2nd day and not doing well at all. It flopped on the first day after a big pop. Overvalued and no dividends to support. A race to the bottom like many ipo’s.

    Dan
    Oct 28, 2015 28:53 AM

    LOL, the same “fools” who called for oil to crash when it was at $100 last summer and all you commodity guys were bullish?

    Just wait, $20 could be a conservative downside target when deflation takes hold again.

      Oct 28, 2015 28:55 AM

      Really Dan?

      Well I have a chart for you then and this one proves those media pundits don’t do their homework before opening their big mouths and starting to blather. This chart is called the “5 year break-even Inflation rate”.

      I have the chart settings fixed on a two year period. Hopefully it links the way I am seeing it. Anyway, the chart has just formed a picture perfect double bottom and that is meaningful because this chart tells us about inflation expectations based on the 5 year Treasury and 5 year TIPS.

      What is REALLY interesting though is that if you overlay the same two year period of WTI Crude oil on the Break-even chart (linked below) you get an almost perfect correlation. And THAT is some seriously god information when one is trying to understand future oil prices.

      And it tells me that if inflation expectations just bottomed and are beginning to bounce that WTI is going to follow them up with price increase, not further declines. They move together in other words. Why? Who knows exactly why…that’s just the collective mind of the market I suppose.

      So now you see where my confidence comes from when I am talking about crude oil getting ready for lift off and the final bottom being posted this year. I don’t just make this stuff up like other people do! Oil is NOT going to see 30 dollars.

      5 Year Break-even Inflation Rate chart — Courtesy of FRED
      https://research.stlouisfed.org/fred2/series/T5YIE

      Oct 28, 2015 28:09 AM

      The drop of oil is no more than trying to push Russia to the brink and harm US shale oil sought after by Saudi. Saudi acted to increase the production 9 months ahead of oil’s decline. So it was pre-planned. This is to repeat the success of mid 1980s when the persistent low oil price broke the back of USSR. I think it is not going to work very well since the demand comes from far more different places now. The talk of reduced demand is just talk. The world demand is still increasing at 900K bbl/day. China has increased the import by 8.9% from last year and it was on top of 8% increase last year from the previous. The increased 2.5 million bbl/day from Saudi and US shale will be swallowed in 2-3 years. The production is down in US by around 500K bbl/day this year. The fact that US has started to sell strategic petroleum reserve shows that we are on the end of oil decline.

    Oct 28, 2015 28:16 AM

    Is there anyone believing FED will raise rate today?

      Oct 28, 2015 28:56 AM

      Not this month. Maybe next.

      Oct 28, 2015 28:17 AM

      no

      Oct 28, 2015 28:01 AM

      I would say next year.