About 10 years of profits in GLD getting liquidated, and trillions invested into Treasuries are likely being re-invested in U.S. stocks.
Probably safe to call the S & P 500 the "Come Hell or High Water" index, nothing seems to faze it, as it keeps marching higher and higher despite all the negative headlines the last 4 years.
Thanks a lot Dan for sharing like this on your blog and KWN every week, not for glory, not for "see, as I told you it would happen" BS, but just for it, as a gift from a neutral, objective, and experienced trader. It's a pleasure to read you in this ocean of arrogance and disinformation.
Just posting my chart FYI. http://s24.postimg.org/gfoccc351/gld.jpg
My point of view : the downtrend is still "contained" as long as the red mlh inf acts as a support. The next few days, it will cross an area of other supports, around 1130 - 1150 $. So even if we once more break the lows next week under 1180, I think there is a fair chance that the market could bounce not far under it, around 1130-1150 $. Therefore I'll be looking for potential divergences on the MACD for example.
On the other hand, should the mlh inf fail with all the other supports in this zone 1130-1150, my humble feeling is that we may see a violent and quick panic selling in the gold market, falling like a stone maybe down to 1000 $ if even very briefly, because suddenly, those supports will disappear. Once more, just sharing my opinion here, not saying I'm an excellent analyst or trader, everyone be the judge from the chart and his own analysis.
On a more fundamental horizon, I'm simply wondering whether or not we shall see in the coming months a strong upward move when this bear correction is over. The arguments in favor to it : Cot reports, Comex registered stocks falling like a stone, GLD stocks falling sharply as well. Is Sinclair right to expect the paper market turning into a 100% cash paper = physical market in the coming months? I'm afraid he may be too impatient. How long can this "scam" on the paper market endure? How far are we still from the "emancipation" Sinclair is advocating? I don't know, but I'm very interested in the answer :)
HdH, Wouldn't be surprised if there is some final flush this week. It 'feels' like it will happen: Jim Rogers saying he doesn't feel the market has bottomed, Martin Armstrong (which is good-getting close!), poor technicals, taper talk, etc...
I hope it does it and we can be over with it.
Dan Thanks for allowing us to comment. It is a very good outlet for the community.
Finally - anyone have a thought on this: Could the taper talk have been planned to raise yields a tiny bit, manageable, but enough to hint at inflation, or at least move markets away from the big D word? Is it not interesting too that JPM and GS have been if not bullish, at least not negative.
@MDL, another bad omen is the dollar index closing high this week, as Dan mentionned in his interview, I think above a key level zone around 84.40. If dollar is strong...then it's even more difficult for gold to go up. Correlation is not absolute, of course, but usually when dollar goes up, gold goes down more or less...let's see. I'm out of the market again and may attempt another agressive bull trade (very short term target) if we reach the 1150 area...but ready to run to the escape doors if we accelerate down under 1130. If we bounce around 1150, you may have a descending wedge starting to take form. Lots of "may" :)
Must be tough going for Sprott, Schiff, and Axel Merk these days, those funds are probably getting Amaranthed.
Throw in John Paulsen and Einhorn at Greenlight, lots of guys getting forced out of the market at the worst possible time.
And then throw in Gundlach, Gross, El-Erian, etc.
All these guys will probably throw in the towel and start buying U.S. bank and technology stocks with a vengeance, since non of them are affected by weak commodities, strong dollar, or higher interest rates.
Mark - I think It's the retail investor that throws in the towel at the low & steps into the approaching high the other asset class. Nasdaq 100 P/E is over 18 vs 11 a year ago. I know it's no longer a fundamentals bound market, but reversion to the mean and overshoots on approach still apply.
The market has no logic: the 10-30 year yields were the same in the fall as they were right before the recent correction, yet low yield was the justification for piling into equities. Maria B saying where else are you gonna put your money? Now higher yields are good for equities as they are a sign of a strengthening economy. The lesson, for me, is that the story is molded to fit the tape.
If the market ever goes down, UAL is my choice to short: First, it's an airline, which is just a junk investment always. 2nd, In the height of the recovery its op cash flow is way down. Free Cash Flow Nil. Has almost 0 book value (trading at 100x book), it had 25% less cash EOY 2012 than 2011. And if you have commodities take off And/or social unrest, Fuel costs are going to go through the roof and passenger miles are going to go into the ground.
UAL loses money even after huge consolidation, concessions from unions, and reduction of available seat miles. The stock went up 600+ % from 2009 bottom. It looks like a Junior Miner ;)
ok, so gold is up moderately today, i think dollar down a bit...but the gold miners are fillayed! but stock market is slightly up...can someone please explain this to me...we have been in these areas before and usually miners outperform gold relatively speaking...i havent followed the market/news too much today but this is pretty strange, non?
thanks in advance...
and ps i do appreciate dan's commentary and the ability for others to exchange chatter here...i gain knowledge and thus power from it by the day.
Looks like a setup for take down to me. NEM hit a fresh daily low, ABX had at best an anemic bounce even after headlines of fresh 20 year (low of LAST bear mkt) / generational buy, even formerly strong issues like RGLD and FNV down substantially. FOMC minutes Wed + a Bernanke speech. HUI:Au getting close to all time low. CITI came out with a report in the past few days saying that NO GOLD MINERS have Free Cash Flow at $1,200 gold (interestingly AUY, GG, NEM, and some others actually had FCF when was below $1,200 in 2009 & 2010).
+ you have plenty of gold friendly people (Rogers, etc.) saying gold hasn't hit bottom yet.
What do I know? But to me it looks like we are getting setup for a test of and probably a break through of lows.
GOFO rate went negative up to 3 month out today. Silver lease rates are negative. Fire works always happen when these go negative. It will probably start when the fomc minutes are released Wens and Bernake speaks Thursday.
Really nice discussions by the Members out here. It is most worthy of having Business News information at such a nice discussion blog is very interesting. Thanks for the same.
Thanks for the sobering analysis, Dan.
ReplyDeleteAbout 10 years of profits in GLD getting liquidated, and trillions invested into Treasuries are likely being re-invested in U.S. stocks.
Probably safe to call the S & P 500 the "Come Hell or High Water" index, nothing seems to faze it, as it keeps marching higher and higher despite all the negative headlines the last 4 years.
To my untrained eye it seems like deflation with a stock bubble. Especially with the dollar rising.
ReplyDeleteThanks a lot Dan for sharing like this on your blog and KWN every week, not for glory, not for "see, as I told you it would happen" BS, but just for it, as a gift from a neutral, objective, and experienced trader.
ReplyDeleteIt's a pleasure to read you in this ocean of arrogance and disinformation.
Just posting my chart FYI.
http://s24.postimg.org/gfoccc351/gld.jpg
My point of view : the downtrend is still "contained" as long as the red mlh inf acts as a support. The next few days, it will cross an area of other supports, around 1130 - 1150 $.
So even if we once more break the lows next week under 1180, I think there is a fair chance that the market could bounce not far under it, around 1130-1150 $. Therefore I'll be looking for potential divergences on the MACD for example.
On the other hand, should the mlh inf fail with all the other supports in this zone 1130-1150, my humble feeling is that we may see a violent and quick panic selling in the gold market, falling like a stone maybe down to 1000 $ if even very briefly, because suddenly, those supports will disappear.
Once more, just sharing my opinion here, not saying I'm an excellent analyst or trader, everyone be the judge from the chart and his own analysis.
On a more fundamental horizon, I'm simply wondering whether or not we shall see in the coming months a strong upward move when this bear correction is over. The arguments in favor to it : Cot reports, Comex registered stocks falling like a stone, GLD stocks falling sharply as well. Is Sinclair right to expect the paper market turning into a 100% cash paper = physical market in the coming months? I'm afraid he may be too impatient. How long can this "scam" on the paper market endure? How far are we still from the "emancipation" Sinclair is advocating? I don't know, but I'm very interested in the answer :)
Have a nice sunday and God bless you all,
HdH,
DeleteWouldn't be surprised if there is some final flush this week. It 'feels' like it will happen: Jim Rogers saying he doesn't feel the market has bottomed, Martin Armstrong (which is good-getting close!), poor technicals, taper talk, etc...
I hope it does it and we can be over with it.
Dan Thanks for allowing us to comment. It is a very good outlet for the community.
Finally - anyone have a thought on this: Could the taper talk have been planned to raise yields a tiny bit, manageable, but enough to hint at inflation, or at least move markets away from the big D word? Is it not interesting too that JPM and GS have been if not bullish, at least not negative.
@MDL, another bad omen is the dollar index closing high this week, as Dan mentionned in his interview, I think above a key level zone around 84.40.
DeleteIf dollar is strong...then it's even more difficult for gold to go up.
Correlation is not absolute, of course, but usually when dollar goes up, gold goes down more or less...let's see. I'm out of the market again and may attempt another agressive bull trade (very short term target) if we reach the 1150 area...but ready to run to the escape doors if we accelerate down under 1130.
If we bounce around 1150, you may have a descending wedge starting to take form. Lots of "may" :)
Must be tough going for Sprott, Schiff, and Axel Merk these days, those funds are probably getting Amaranthed.
ReplyDeleteThrow in John Paulsen and Einhorn at Greenlight, lots of guys getting forced out of the market at the worst possible time.
And then throw in Gundlach, Gross, El-Erian, etc.
All these guys will probably throw in the towel and start buying U.S. bank and technology stocks with a vengeance, since non of them are affected by weak commodities, strong dollar, or higher interest rates.
Mark - I think It's the retail investor that throws in the towel at the low & steps into the approaching high the other asset class. Nasdaq 100 P/E is over 18 vs 11 a year ago. I know it's no longer a fundamentals bound market, but reversion to the mean and overshoots on approach still apply.
DeleteThe market has no logic: the 10-30 year yields were the same in the fall as they were right before the recent correction, yet low yield was the justification for piling into equities. Maria B saying where else are you gonna put your money? Now higher yields are good for equities as they are a sign of a strengthening economy. The lesson, for me, is that the story is molded to fit the tape.
If the market ever goes down, UAL is my choice to short: First, it's an airline, which is just a junk investment always. 2nd, In the height of the recovery its op cash flow is way down. Free Cash Flow Nil. Has almost 0 book value (trading at 100x book), it had 25% less cash EOY 2012 than 2011. And if you have commodities take off And/or social unrest, Fuel costs are going to go through the roof and passenger miles are going to go into the ground.
UAL loses money even after huge consolidation, concessions from unions, and reduction of available seat miles. The stock went up 600+ % from 2009 bottom. It looks like a Junior Miner ;)
ok, so gold is up moderately today, i think dollar down a bit...but the gold miners are fillayed! but stock market is slightly up...can someone please explain this to me...we have been in these areas before and usually miners outperform gold relatively speaking...i havent followed the market/news too much today but this is pretty strange, non?
Deletethanks in advance...
and ps i do appreciate dan's commentary and the ability for others to exchange chatter here...i gain knowledge and thus power from it by the day.
Looks like a setup for take down to me. NEM hit a fresh daily low, ABX had at best an anemic bounce even after headlines of fresh 20 year (low of LAST bear mkt) / generational buy, even formerly strong issues like RGLD and FNV down substantially. FOMC minutes Wed + a Bernanke speech. HUI:Au getting close to all time low. CITI came out with a report in the past few days saying that NO GOLD MINERS have Free Cash Flow at $1,200 gold (interestingly AUY, GG, NEM, and some others actually had FCF when was below $1,200 in 2009 & 2010).
Delete+ you have plenty of gold friendly people (Rogers, etc.) saying gold hasn't hit bottom yet.
What do I know? But to me it looks like we are getting setup for a test of and probably a break through of lows.
GOFO rate went negative up to 3 month out today. Silver lease rates are negative. Fire works always happen when these go negative. It will probably start when the fomc minutes are released Wens and Bernake speaks Thursday.
ReplyDeleteHi Dan -
DeleteCould you comment on this (GOFO neg) - it seems to be getting a lot of airtime, but not exactly sure what the ramifications are.
Really nice discussions by the Members out here. It is most worthy of having Business News information at such a nice discussion blog is very interesting.
ReplyDeleteThanks for the same.