There are as few bears in the market as there were back in 1987!
An interesting article that takes a true look at the spread between bulls and bears as it relates to the conventional markets. We all know that when everyone is bullish that is a sign of a bubble and time to get out. This time looks no different.
Here is a chatr that really sums it up…
I think the key here, Machine Gun, is “mass psychology” as I have repeated numerous time during the past few days!
Why does it defy logic?
It defies logic because the fundamentals of The American economy are not there, when I walk around my house I see lots of goods made in China but nothing made in The United States Of America anymore. DT
Ah, but psychology is not based on factual logic in all cases is it Machine Gun!
James,any other questions? DT
Yes. What is wrong with buying things from China if they can manufacture them cheaper and pay their employees less money. When are American workers going to get off their high horse and admit they are (were) getting paid way too much money for something someone else is willing to do for less? This is what killed Detroit
I think you guys are talking about two entirely different stories.
James, as I noted the other day I am living in an area of Africa where factory wages are little better than one dollar each day. They make shoes, clothes, auto parts, pharmaceuticals, confections and plastics near my home. T-shirts that are hot off the press and 100% cotton of good quality sell for about a buck apiece. Please explain why they retail at 20 dollars or more in the US or Europe. You see what has happened is not only that Western workers lost their jobs but also that whole economies have become little more than sweat shops for the rich countries. Workers on both continents got screwed though. The middlers and traders are making all the money. I mean I know some factory bosses and they are just competing their arse off trying to deliver a cheaper product than the next guy down the road in order to get the attention of the big buyers. The traders (think Walmart, Sears, JCP or whoever it is in your area selling clothing) are making a KILLING on the differential in costs and sales. You could cargo up a container of new t-shirts here and ship them abroad and make 10 times your cost even after shipping and taxes are paid if you are also the end seller. It is stupidly profitable to import from Africa now. Like it was in China some years back before their costs got out of hand due to wages and land. And buyers get the red carpet treatment from local governments. They want a piece of the trade action because they are urgently short of US dollars. Anyway, I don’t think workers anywhere are on a high horse. Free trade and duty free zones etcetera have been very damaging to incomes across the globe. Very few have seen the benefits that have accrued to those engaged in international trade and selling into wealthier markets.
We have an oil boom right here in our own backyard. This is fundamentally good for America. We lead the world in technology. We are miles ahead of the world in terms of innovation. This too is fundamentally positive for gold.vtol many pele underestimate America and Americans
James, what makes any country or society great economically is when they can produce goods that the world wants and is willing to buy. America was once that country sadly they have given it away and relinquished that right. DT
You are absolutely correct.
Exactly, and now our government bemoans expiring unemployment benefits for the chronically unemployed while secretly negotiating another ‘free trade’ deal! Sure, why not? After the backroom handshakes and back slaps, it will be railroaded through Congress on a fast track, not time for debates, no time for amendments, no time to look and see who gets screwed this time. Oh well.
Yes James, but what you fail to see is a society in terrible decline for just the reasons you mentioned, it really is history playing itself out. I’m sorry but you can say what you want but the facts are undeniable. DT
I do agree completely! But sadly we not not alone in our decline…
Figured two smart guys like you would agree!
It seems to me there are plenty of top callers. I’ve seen bubbles and this ain’t one yet. Where are they going to put all that cash? Under the mattress.. DOW zooms and Gold gets crushed. Interest rates may stay low for some time.
http://armstrongeconomics.com/2013/12/17/the-dow-to-be-or-not-to-be/
Thanks for the link Billy!
Bubble or not, stocks are overvalued and are increasingly likely to see at least a correction soon.
Boy, you would sure think so Matthew!
Al I love to see gold turn around but I just don’t see it.
When I talked to the best performing hedge fund manager I know of he said “interest rates can stay lower for longer than people think and boring stocks can do great” He also says ” I see nothing to turn bullish on Gold”
After going to 100% cash before the crash he retired at 41yrs old. He opened a new hedge fund a yr ago. He knows how to avoid carnage. I kinda got to laugh when people say “sell the Expensive DOW and buy cheap GOLD” and by what measure would you be using? There’s a hell of a lot more than that to it.
Here’s his fund http://stockcharts.com/h-sc/ui?s=JFS/UN.TO&p=D&yr=1&mn=0&dy=0&id=p49256373715&listNum=1&a=325726618
John Hussman has built a case for why stocks are much more expensive than they might appear. Here is a link to one such article, which talks about how stretched corporate profit margins are:
http://www.hussman.net/wmc/wmc131216.htm
Thanks Eric.
There is a hell of a lot more than that to it.
This is, in effect, the big problem.
I would say sell the Dow AND gold and buy the miners. In my experience there is not “a hell of a lot more to it” than selling strength and buying weakness –especially when you have extremes in both as we do now.
And yet another good point, Matthew!
If we cannot audit the FED then how do we audit the taper?
If I were you I would wait a while and see what happens; although America had the best government in the world it has allowed it’s constitution to be compromised, the real market has a way of showing it’s hand despite interference. DT
THE COURSE OF STOCKS DURING THE COMING MONTHS WILL DEPEND ALMOST ENTIRELY ON THE MONEY SITUATION, of this I feel certain. DT
There seems to be a lot of things that lack proof!
A flight to safety or just safer than the other uglier options seems to be the best conclusion. That’s why its such an crappy time too invest. Its all over the place! Things can push much farther than we would want to believe due to broke corrupt gov’s and distorted markets by EXTREME monetary policy.
Do you remember someone recently saying he remains on the sidelines?
Geez, just listen to talk radio (one example here) everyone is bearish.
That is not the feeling I get from everyone!
It doesn’t take everyone Al as you know. You need almost universally bullish for a big top. We are getting there though but the as MA says the retail investor is not in the market and it may take time.
Until the retailers are in…we will continue to go up. Retailers ring the bell.
That’s for sure. When the majority is in they will. I’m actually not in the DOW.
The TSX had a hell of a breakout and then retested. It’s lagging big time over the Due to its commodity waiting but today it did nearly as well. It’s not hot as hell like the Dow.
And yes har most are traumatized from the prior crashes so as Al said he terrified of the conventionals and this I believe will be the fuel for the markets. I think…think one can buy the TSX and get a lift and if and when commodities perk up you have some bonus fuel.
Good luck!
Come on Al you have been saying since 2009 the conventional stock market terrifies you.
That’s why I bought a 2X index 2 days ago. Nice pop today…and a breakout. Have to be on guard after a rally I think.
har: Aren’t you a bitcoin bull? 55% off now. It would be Like Gold $1900 down to $855 in 2 weeks. China’s working on killing it. Gov’s will not stand for something they can’t control…Its going to be very interesting indeed.
Talk radio: GCN, RBN, King World, Rush, Hannity, Financial Survivor, Keiser, Digital Talk, etc etc – they are all snarling bearish.
All you need is a regulatory system without oversight ,100:1 manipulation of paper contracts and a Comex system that owes out 70 X the gold they might, maybe still hold.
In metals markets no top is needed.Just destroy the investing public for the next 2.5 years while the net short position of participating Fed banksters are dumped.
When all the hillbillies come out to tell us that bitcoin and the Fed are wonderful entities that serve the common good of all wee serfs we know that the B.S. has hit a bullish top.
That would be now.Advising people to buy stocks and not look at a monthly chart of gold is laughable,given the net long position in gold of the banksters.
Matt nothing concrete here.
The Dow Jones Industrials rallied sharply with the Fed starting to taper. We have a near double top but today was a turning point and this week was also a target for a Panic Cycle which seems to be on point. However, while the market remains strong long-term, there are signs of some exhaustion starting to creep in. If the Dow cannot break to new highs and close higher tomorrow, we may still move back to retest support for Jan/Feb. A low at that time will point to a rally into the end of summer. A high in Jan/Feb in the 16650 level, could warn of a decline into that period with a rally into 2015.75. But a low, may signal the Cycle Inversion is developing now. That will warn of a very serious period between 2015.75 into 2020.05. TIME remains constant. Events and Price are the variables.
Whether the cycle inverts or not, I see much greater opportunity and lower risk in good miners than in conventional stocks at current levels. If the Dow continues higher into 2015, the miners will outperform. If the Dow declines into 2015, the miners will dramatically outperform.
I agree longer term but the miners should lead out. Their dead still. If gold cracks you can lose 10-30%. I own enough now $3000 gold could net me 7 figures. If we get sacked ill really load up. Look at Barkerville for instance, drills 3oz per ton and virtually no response to the news.
This guys #2 gold timer for decades so load up on Gold!! No thanks:
The key for the bulls is that 1212.43 in Spot Gold holds. That was the recent December 4 low. This past Tuesday gold bounced into my forecast 1263 to 1278 range, so that may have been it for the rally! However,
if we can rally back through Tuesday’s highs, there may be light at the end of the tunnel. Under 1212.43, we could very likely see a test of the big 1186.40 low from June 28. A potential break toward 1000 cannot be discounted, but I’m taking it one day at a time. Bears are crawling around everywhere. So far, historic ‘seasonal’ patterns which are usually strong in February have failed gold this year. Important resistance levels are way above the market and include: 1263, 1278, 1292, 1330, 1362, 1378, 1433 and 1500. Support is at 1186, 1080 and 922. Bottom line: I’m a long- term bull, but the bear’s claws are still clinging on. In the chart above a bearish head-and-shoulders pattern is highlighted. Generally speaking, this pattern projects lower prices, lower prices confirmed once the low of either the left or right shoulder is broken. In this instance, such a break would translate into a push down into the 1050-1100 range. Though this is my short to near-term bias, a rally above the head on increasing volume would change the picture and suggest the worst is behind us for now.
Matt: I use some real data and a few analysts that have sold the top and see zero bottom yet. Some quality African miner just lost 20% in 2 days.
I not going to buy on hope.
There are also African companies like NSU and TGM.v that bottomed many months ago and are up very nicely since. TGM is up 22% in December alone. Two days ago it was up 100% from its June low.
The miner that you are talking about probably put out a bad press release.
There are a couple stocks and only a couple that are developing bottoms. The best is SMF but when the underling commodity is in a bear market you are playing with fire in this sector.
We are ending a cyclical bear (no, it is not yet technically over). I like TGM much more than SMF for upside potential. They will be very profitable even at $1,000 gold.
If no one ever played with fire, who would turn the market and give all those technicians a buy signal? 😉
None of my miners are making a new low today. I will be buying more miners very soon.
We are getting closer I agree..
At the end of any market you always get an advance that defies logic but not mass psychology, never underestimate the love of Americans for a Bull Market especially in the final stages. DT