Watch for the parabolic move in the conventional markets over the next couple months
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Gary elaborates on why he thinks individual investors will flow into the conventional markets and cause a parabolic move in the next couple months. However after this parabolic move he says the smart money will get out and the markets will experience a major and long move downward. This will force the Fed to react but it will be too late and injecting money into the markets will only lead to increases in commodity prices.
Yellen is between a rock and a hard place. Her one and only critical position is to keep interest rates low.
If by QE she causes the stockmarket to rise, she will accept that. If the stockmarket drops, I do not think that fact alone would cause her to increase QE.
She will, however, make sure the US does not default on its debt, even if she has to buy it all; thereby collapsing the value of the dollar.
Privatize the profits socialize the costs/losses. I know it’s been said over and over, but here’s a graph and narrative that say it the best I seen.
The Euro is disproportionately high today. I do not know why.
I could speculate that Europe believes the lull in activity in Ukraine may not mean war, hopefully.
Hi, Gary
interesting analysis. Thank you.
whatever happens, it is not likely to be boring. :o)
Note to Corey: Not sure what audio settings you are using, but keep using it ! I find audio of your voice in past few weeks sounded a bit ‘metalic’ or ‘shrill’…. hard to explain.
Loyal listener since Jan thanks for a friend’s recommendation.
Very very interesting Gary. Not sure an economic collapse will coincide with the market collapse. I see a scenario where the economy could just grind lower over a longer time frame.
There’s a lot to digest in this commentary.
First I said yesterday on this blog to watch the S&P.
I said if closed above that 1851 level it was off to the races in stocks again and once again gold would be the forgotten asset no one needs.
This is exactly what is happening.
Now the question is how long and how high can they go?
Is this a melt up phase?
You state the public will now come rushing in because they see their neighbors making money.
You also state the stock market is separate from the economy.
I would respond to that by saying I agree the stock market (wall st.) has been disconnected from main st. for quite some time now.
HOWEVER FOR YOUR HYPOTHESIS TO PLAY OUT THEN YOU CANT HAVE A WALL ST AND A MAIN ST THAT ARE SEPARATE
IF THE ECONOMY IS SO TERRIBLE WHERE IS THE PUBLIC GOING TO GET THE MONEY TO START POURING INTO STOCKS. MOST PEOPLE ARE BROKE LIVING PAY CHECK TO PAY CHECK
So while I agree the stock market looks like it is approaching lift off I do not think it will be the general public to do it
It will be he usual suspects.
Not to mention too many people have sworn off stocks for good.
Regarding gold the failed attempt to take out $1340 once again shows we are still in prolonged bear market.
THE FACT THAT THE $ TANKED TODAY AND GOLD COULDN’T EVEN GO UP PROVES THIS POINT AGAIN.
You also talk like you have a crystal ball. This is going to happen, then that is going to happen, then this will happen. In 6 weeks this will happen. In the 2nd half of the year this will happen.
This is all BS
BS? Sorry James, but I can’t figure out where you get such a strong belief in your own competence.
Pull up a daily chart for gold and find January 30. Gold plunged $30 that day and, as usual, you (and a certain bird) were bearish. And wrong. Have a look for yourself:
http://www.kereport.com/2014/01/30/double-trouble-doc-rick/
Matthew,
Just reviewed your link and the threads. Correct, Matthew.
None of us are 100% competent! It’s good to hear people’s opinions; we don’t have to believe them all but it’s nice to diversify in terms of thoughts. That makes this site not a one trick pony, I feel, but rather a really useful forum.
As for the dollar and gold, they haven’t been that correlated in the last couple of years on a longer term basis. Gold’s $270 drop in 2 days in April 2013 was met by virtually no move in the dollar, for instance. In my view, gold has traded almost parallel to the Yen for 2.5 years. Why? I have absolutely no idea!
I personally am not that sure about the gold bullishness but I am happy for this rally because at least gold has rolled to the upside nicely in the last couple of months, after a deceleration in the downtrend, making a nice bowl formation.
What happens after this rally and how far will it go? Nobody knows, at least nobody currently stuck on the surface of this little planet!
Thanks for the information Matthew. Helps us to identify and separate the competent from the nitwits.
On a side note, the Consumer Metrics Institute does a good job of analyzing the GDP report each quarter. Here is a link to their site:
http://www.consumerindexes.com/
Scroll down the page to see the commentary and pay special attention to the bottom of the report (where they have the section ‘Summary and Commentary’).
In today’s edition, they include some great data, documenting how inaccurate the BEA’s numbers are at turning points in the economy. The ultimate revisions can be enormous.
I agree some of the above comments. Most of my friends are fed up with stocks & malinvestments and bankers-period! And with this economy, who has money to invest?
people that invest in the markets have always been a minority.
After this “crash” and yellen inflates with more qe, do real estate prices increase with the commodity prices?
Is that the start of inflation?
FYI:
Colorado Resources, IMPACT Silver Corp and Gold Reach Resources Featured on Episode 21 of the Next Biggest Winner TV Show This Weekend
http://finance.yahoo.com/news/colorado-resources-impact-silver-corp-164006368.html
Matthew – I’m not sure how you can say I was wrong when the race hasn’t finished yet.
Yes if you are a short term trader I suppose you can claim a victory.
However I am not a trader and am looking at this from a long term perspective.
So with that said nothing gold has done in these last two months changes my long term thinking.
You know I hold gold,you know I’ve added since the April crash, you know I haven’t sold anything.
But a two month bounce does not a turn make.
Until I see my key levels taken out, levels I’ve repeated over and over I am still in the camp that we are in a bear market.
If you’ve made money trader gold that’s great,
I am sitting on my stack waiting for a turn.
Gold hasn’t done that yet considering the big picture
I think it is a serious mistake to consider Gold and precious metals as an investment.
They should be considered as an insurance, not an investment.
Precious metals do not generate income (just like the bankers always tell us) They may rise in value, hopefully to keep place with inflation. While not always keeping pace with inflation,but sometimes lagging, sometimes leading, sometimes messed up by government interference, history teaches us that over several thousand years they have kept up with inflation. Precious metals are not an investment, but a safeguard.
On the other hand, mining stocks can be an investment, but for most they are speculation. In order to use mining stocks as an investment, you or your adviser MUST have more knowledge than the majority of those people or institutions investing in those stocks. Otherwise, it is speculation.
As a person who has maybe 50% of his assets in precious metals and mining stocks I do so because I read all the data I can get my hands on. I believe (probably mistakenly) I can spot a flim flam artist better than most. (Including some of those Big Al unwittingly has on this report) But, even then I limit my investment in mining stocks and look at other commodity stocks and other stocks in general.
I believe reading charts can give an edge in timing, but most of all I don’t believe anything is as predictable as Gary would have us believe. Charts give information which becomes less and less predictable as one goes more than a few days into the future. As for cycles, I believe the behavior of people goes in cycles and the behavior of stocks can go in cycles, but in terms of predictability
maybe I have listened to Prechter too often and found him wrong. I will listen to Gary for another year or two and then judge his predictive ability.
Graham and Dodd (who wrote the seminal work, “Security Analysis”) said that it is all speculation. That an “investment” is a speculation, that works out in hind sight.
I agree. That said, there are ways to increase your odds (as you highlight)
CFS, no one can predict markets with any degree of regularity over the short to medium term to concistently make money.
And if that weren’t the case any prognosticator who can doesn’t need to sell advice.
CFS,
No one gets it right 100% of the time. I’m sure I will have to make tweaks to my forecast as we go along, and the timing won’t be perfect, but I think the main themes will play out.
Oleary, the “dragons den” guy figures mining is the last place to be.
He thinks like a lot of people 5-10% physical gold, which he says he holds.
His thinking is insurance, but a invesments…forget it.
I found his reasoning funny to say the least. reminds me that I am rolling dice.
Sure, there are ways to reduce risk or increase leverage, but listening to his perspective reminds me I am gambling.
But Im a gambler and when these things hit it sure is fun.
Like a horse crossing the finish line or drawing that 5th heart.
Just interesting that gold is both insurance and gambling.
EPA crushes Pebble Mine…..
http://www.adn.com/2014/02/28/3350190/epa-starts-process-that-could.html
Thanks for the link. I recently bought a tiny number of shares in Northern Dynasty, as a pure speculation on the Pebble Mine. Treating it like a long-term call option, without an expiration date. I guess you could say ‘bankruptcy’ would be the expiration date :o)
I never look at gold as insurance (see my post yesterday under doc) however it is like gambling.
Bet the 3 horse, or the 5th heart as you say, or speculate on rising or falling gold prices.
No difference.
Gary talks about after a melt up in stocks the parabola as he puts it will crash and once it crashes it can’t be fixed.
By the same logic WE WITNESSED THE BIGGEST BUBBLE IN SILVER A FEW YEARS AGO.
TALK ABOUT A PARABOLA.
THAT BROKE AND IT CANNOT BE FIXED.
The days of $50 silver are over.
One day you can tell your grandchildren you were alive when silver went to $48.50
I hope you’re right J-t-l
“Hold gold and hope in never goes up”.
~P Grandich
Unfortunately, I believe gold WILL go up, as everything else goes for a shit.
I would be inclined to take the ‘over’ on that one, James.
My guess is that if Gold were to get to $5000 plus, silver will be several hundreds of dollars per ounce. with gold out of reach for retail, they will turn to silver in a major way.
Of course, this assumes that the gold/silver ratio will be cut in 1/2 or more from its current ratio. but I think that has a good chance to happen.
$50 silver was just getting warmed up.
Based on the ABC pattern in the Dollar I see a price target of about 79.25. This is conveniently the support based on the 25 Oct low….will be interesting to see how if the dollar rallies a bit off that level.
“You also talk like you have a crystal ball. This is going to happen, then that is going to happen, then this will happen. In 6 weeks this will happen. In the 2nd half of the year this will happen.
This is all BS”
Right on! His predictions are no better than flips of a coin or wild dart tosses. Even if he turns out to be correct, he will, most likely still lose money from getting chopped up trying to trade it. Even if he doesn’t lose money this time, then there is still the matter of getting his subscribers back to even, and that ain’t gonna happen anytime soon….probably never. Just sayin’
Gold made the top on week 9.I am little afraid that we may see pullback to 1250 then short top at 1300 and all the way down to 1000. The reason-Gold did not follow weak Dollar.It seems manipulation starts again.
Don’t put your faith in forecasts. They are usually wrong.
Can anybody recommend an options brokerage firm that offers good service at reasonable commission?
[…] Daily commentary for Feb. 28 […]
The current decrease in Gold, in my opinion, is nothing more or less than the end of month effect, whereby bankers deter people taking physical off the futures market.
Watch for back to normal increases next week.