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What should we expect for the markets in 2016?

December 1, 2015

On Big Al’s birthday Gary Savage starts the day off for us. We take a look at the US equity markets and the direction we think they could move when we enter 2016.

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Discussion
44 Comments
    Dec 01, 2015 01:33 AM

    Happy Birthday Big Al! And many more…….

      Dec 01, 2015 01:43 AM

      Big Al, you were born on Woody Allen’s 8th birthday and Bette Midler was born on your 2nd birthday. So you are sandwiched, for lack of a better term, between Woody and Bette. Congrats!

      Dec 01, 2015 01:51 PM

      OWL………is now totally on the govt DOLE………fully funded by social security…..lol

    Dec 01, 2015 01:38 AM

    Interesting comments on high yld bonds, very accurate.

    Dec 01, 2015 01:41 AM

    All I know is gold and oil look like crap. Even the bear sides don’t look appealing.

      Dan
      Dec 01, 2015 01:07 AM

      the worse gold looks the closer the bottom is! 🙂

        Dec 01, 2015 01:31 AM

        Off course. It much closer to the bottom than $1900

          Dec 01, 2015 01:40 AM

          The ‘bright spot’ would be a breakout in TLT. There’s a significant spread between TLT and gold prices:

          http://schrts.co/ilm1CC

            Dec 01, 2015 01:40 PM

            Interesting point on long term treasuries in relation to gold, and great chart. Thanks FranSix.

    bb
    Dec 01, 2015 01:46 AM

    happy happy Al.

      Dec 01, 2015 01:44 PM

      Good chart Gary. I agree with you about the S&P should have pulled back to that 200 week moving average at least, but it did seem to get an overly strong boost. I could see a correction coming in the next 2 months as well.

      Good comments in the blog underneath your chart as well.

    Dec 01, 2015 01:08 AM

    All the best @ Big Al !!! Thanks for your work @ KER!!!

    Dec 01, 2015 01:13 AM

    When you have corporates with a junk rating or investment grade rating, it’s how bonds are evaluated by a ratings agency. But junk bonds, despite their solvency risk have seen rates as low as 3%! Added to this, you probably have corporates that are rated AAA that really should be rated junk. There is almost no difference between junk and corporates.

    Notable to the discussion that no matter how much people insist that governments are bankrupt, treasuries are more strongly bid as junk/corporates sell off. The widening spread between yields on treasuries and junk/corporates is a tell tale sign the asset bubble is having difficulty remaining inflated.

    Dec 01, 2015 01:24 AM

    Happy bday Al. Appreciate the service you provide tremendously.

    Ugly black candle today so far in GLD, which I believe should mark a swing low on $gold. If we continue to rally from here, this rally isn’t to be trusted IMO. I would rather gold just make another lower low and put in a convincing bottom.

    Whether the Fed raises or not in December, the decision will surprise me. If they raise, they will be raising into a very weak economy. Why didn’t they raise back in 2014??? If they hold off on rates, their credibility will take a huge hit in terms of the conventional markets IMO.

    If they do hold off on a raise, it will be 100% crystal clear to me that the Fed’s and ECB’s goal was to get the USD as high as possible before it resumed its decline in terms of the DXY.

    Since 2000, gold has crushed everything. Yes, it has given a hell of a lot back vs US stocks, but it is still up multiples of the US stock market since 2000. And gold has completely crushed all other commodities by a mile. I personally do not think this very long term trend will end until they hit the reset button. The vermin bankers are fighting the laws of nature and economics, and they will ultimately lose, big time. Then again, they probably know this and are just kicking the can as far as they can before it all implodes.

    Dec 01, 2015 01:30 AM

    Happy Birthday, Big AL!

    72 you say? You don’t look a day over 50!

    And here is a birthday present for you (and everyone).

    https://www.youtube.com/watch?v=6McB0jhPWqs

    Dec 01, 2015 01:13 AM

    GLD is actually red now. Would prefer it close red, rather than black. I know that sounds crazy, but to me it leaves a much cleaner chart. It’s sort of like leaving a gap behind. It remains hanging over any rally.

      Dec 01, 2015 01:46 AM

      Some gold stocks on the other hand are already on the move before gold has fully consolidated its new base. For example, Silver Wheaton is up 10% since November 17th while Yamana has done better than 20% in the same time frame. There are many others obviously. A stealth move is underway in the miners. The market has already anticipated golds bottom and is not waiting as buyers pull the trigger on the better companies.

        Dec 01, 2015 01:06 PM

        Just to give you a better idea of what I am talking about above, there are a host of gold and silver companies that all inexplicably hit bottom and started a bounce on November 17th.

        Gold however fell further after that date so its a puzzle to me as to what moved these miners on that particular date but take a look for yourself at this snapshot group that has jumped anywhere from 5 to 25% in the past two weeks.

        Randgold, Taho, Silver Standard, Endeavor, Royal Gold, Couer, Avino, First Majestic and many, many others including those noted above. I think the move higher in miners has already begun and people who are watching gold itself and feeling dejected about its slow bottoming process are already missing the early action.

        So keep that in mind. At this stage, even a small percentage move in the price of gold higher can result in double digits where the companies are concerned and it does look like that is about to happen at any moment now.

        The market is anticipating golds future price action through its proxy on the mines themselves. The TSX looked really positive on mines the past little while with a large number of movers being in the metals category.

        You need to be nimble in such cases though as the largest price increases come at the start of a bottoming process in precious metals. Most of the gains in fact happen within the first few days and that usually leaves everyone else chasing prices and picking up nickels after the move has come and gone.

          Dec 02, 2015 02:29 AM

          I am long AUY from $1.70 still. Unfortunately, still long AXU from much higher.

    Dec 01, 2015 01:16 AM

    Happy Birthday, Big Al

    Dec 01, 2015 01:49 AM

    Happy B-Day Big Al, Love the way you do your shoe with class and dignity.

    Dec 01, 2015 01:05 AM

    What is it gonna take to get that MACD to separate on NUGT and JNUG so that I can buy for crying out loud?!? I can’t believe the price is going up as much as it is while the MACD looks like a piece of rope laying on the ground.

    Dec 01, 2015 01:10 AM

    Happy Birthday, Big Al… The big 7-0, great show!

    Tom
    Dec 01, 2015 01:26 AM

    Long RGLD for swing. Good miner, good financials.
    Target $54

    Dec 01, 2015 01:38 AM

    wait till you get to 92 Al!!

      Dec 01, 2015 01:55 PM

      you are as sharp as any 59 yr. old………..MS A…………glad to know you are still kicking and youthful at heart………..appreciate all your insight…….

    Dec 01, 2015 01:19 PM

    total spectrum……………hum bug…………….lol

    Dec 01, 2015 01:52 PM

    Happy Birthday AL !!!

    Dec 01, 2015 01:16 PM

    Looks like we have lift-off on gold miners. Anyone know what the heck is going on?

      Dec 01, 2015 01:42 PM

      Yes, I had a couple of nice pops today in my gold & silver miners. It didn’t hurt my feelings any…. 🙂

      Dec 01, 2015 01:44 PM

      pump & dump courtesy the banksters are u ignorant or something…r u a banker

    Dec 01, 2015 01:20 PM

    The market is likely to get shaky and volatile in January and February. I am buying the vix to get ready.

      Dec 01, 2015 01:52 PM

      Not a bad idea Paul L. I’ve made money on the VIX several times this year and have been waiting for a new entry point. Honestly, I’m having a hard time with the general markets and most often focus on the S&P and Dow, but feel like we are teetering on the brink.

      One side believes the blow off top is ready to start in the general markets fueled by a Santa Claus rally; and the other side sees the general markets in a topping pattern, ready to take the elevator down. Then there is the December Fed speak awaited at the FOMC mid-month, where they play out the insane spectacle “To Hike, or Not To Hike……”.

      I do agree that volatility is surprisingly low again. It may be a good time to jump back into some TVIX or UVXY soon. I’d like to see if the most recent highs will get tested, before going in too heavy right now though. The thing is that when Volatility spikes, it is usually sudden and more short-lived, so it doesn’t hurt to get into position over time.

        Dec 01, 2015 01:56 PM

        For clarity – I want to see if the S&P and Dow will approach their most recent highs again, or if the markets present a scenario where we get the opposite and start heading lower again. There should be a corresponding low in volatility if the markets test their recent highs, and a bump to a jolt if the Bear scenario plays out.

    Dec 01, 2015 01:41 PM

    Ellis Martin Report Silver Summit 2015 – Published on Dec 1, 2015

    On this week’s edition of The Ellis Martin Report, you’ll hear several interviews from Ellis’ short trip up to San Francisco for the Cambridge House Silver Summit and Resource Investment Conference. He spoke with the silver-guru David Morgan of The Morgan Report.com, geologist and analyst Brent Cook of Exploration Insights.com, Greg Johnson, President of Wellgreen Platinum (WGPLF), Keith Neumeyer, President of First Majestic Silver Corp NYSE:AG) and Yannis Tsitos, President of Gold Source Mines (GSX.V).

    https://www.youtube.com/watch?v=Wa0473FQpoU

      Dec 01, 2015 01:08 PM

      For those not familiar with Wellgreen Platinum, it is one of the few N. American companies in the PGM & Nickel space that has a very interesting story developing. They have a number of exploration targets, where over the next 6 months they’ll have 6 drills going, and they’ll be working on their Pre-Feasibility study. It will be interesting to track their success.

      http://www.wellgreenplatinum.com/pdf/Wellgreen_Platinum_Corporate_Presentation.pdf

        Dec 01, 2015 01:26 PM

        thanks for the info…………

        Dec 01, 2015 01:34 PM

        They have been on my watch list for a while. Have yet to buy shares but may in near future.

          Dec 01, 2015 01:00 PM

          2015 PEA HIGHLIGHTS
          100% owned WellgreenPGM-Nickel Project —Yukon Territory, Canada

          2015 PEA average annual production (first 16 years):
          •208,880 ounces of 3E (42% Pt, 51% Pd and 7% Au)
          •73 million pounds of nickel
          •55 million pounds of copper
          •Potential to add up to 30 years with additional open pit mining from existing Mineral Resources
          •Strip ratio: 1:1 for first 5 year starter pits, 0.75:1 Life of Mine
          •Grade first 5 years: 2.5 g/t Pt Eqor 0.65% Ni Eq[0.32% Ni, 0.31% Cu, 0.43g/t Pt, 0.35g/t Pd, 0.09g/t Au]; First 16 years of operation: 1.9 g/t Pt Eqor 0.51% Ni Eq[0.28% Ni, 0.18% Cu, 0.29 g/t Pt, 0.29g/t Pd, 0.05g/t Au]
          •Milling starts at 25,000 tpdfor five years, then increases to 50,000 tpdfor 20 years
          •Base case would produce Ni, Cu & PGM concentrates using conventional sulphide flotation, which would be shipped year-round via existing deep sea ports in southern Alaska
          •Initial Capex: $CAD586M (includes a $100M contingency)
          •Lowest quartile all-in sustaining costs on co-product and by-product basis

    Dec 01, 2015 01:56 PM

    An interesting story about Greece where graves are being leased and people can’t afford to keep paying. Why Greeks are exhuming their parents:
    http://www.bbc.com/news/magazine-34920068

      Dec 01, 2015 01:10 PM

      Even dead we are all renters.