Sticking to his call of entering the bubble phase – here’s why
Gary Savage is with us today sticking to his call of us entering a bubble phase which the commodities will follow.
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welcome……to the WORLD……………
WACKY WEDNESDAY
Al, must be at bible study………
SILVER HANGING STRONG……. that is 4 days…. I see a TREND………………..
Marc:
I’ll drink to that and I’m sure that Al might also. What happened to the Aztecs?
Good discussion Gary & Cory. I’m willing to admit that the markets have an odd disposition at present, and it has been challenging to get a read on the direction for the general markets, currencies, bonds, and commodities.
The general markets have recovered a bit, but I’m not convinced they are starting the blow off phase quite yet. Maybe I’m in the camp with dumb money on this, but I am expecting a further pullback in October, and then the blow-off phase after that consolidates.
As for Oil, yes it is gaining some ground as expected, and the US dollar has been falling as other currencies rally. This has helped the cause, but I see strong resistance coming up in the $50-$51 area for Oil where it could easily revert back down.
As for precious metals, it is possible that that bottomed with Oil back in July, and I’m keeping an open mind, but I still expect one last leg down for the final washout, as July 24th didn’t feel like the bloodbath phase. Same thing for commodities.
What I’d like to see is one final leg down in Gold, Silver, Oil, and base metals like Copper, Nickel, Tin…….and a few more bankruptcies and mergers/takeovers, and then a basing period at those lows for a bottom. However, I could be way off here and it is possible we are in the “Stealth Bull Market” in Oil, PMs, and commodities. I’m just not sold on that until I see a few more weeks of data, so for now I am cautious but doing short-term swing trades in mining stocks.
Good luck to all in their investing!
Chart indicators still call the major turns Gary, just fine!
http://stockcharts.com/h-sc/ui?s=XLE&p=D&yr=0&mn=10&dy=0&id=p76136046407&listNum=1&a=426770586
There is always a reason for the reaction, Oil backing off from $50 today….inventory data and production
original JJ – Yes the MACD is an investors friend. Based on that XLE chart it looks like it is getting in the area where it will cross again marking another short term top (not there yet but getting close).
I hadn’t refreshed my screens since earlier in the morning (since I’m at work) and it looks like it already topped and dropped.
Shad, its not the MACD (a lagging indicator) its the Slow STO on the XLE chart I showed
Yes, I apologize, and went back and looked at the chart you posted again, and see that now.
Normally you have posted on the MACD in the past and I just saw the red and blue bars noting tops and bottoms and thought that is what you posted. I like the Slow Stochastics, ADX, and RSI in combination with the MACD to give me a more holistic approach to turns.
Thanks for posting the XLE chart JJ.
As you know there is no perfect indicator or we’d all be sitting on our own island…at a min it allows far better exit, entry points knowing that you have the correct action behind your position, short or long.
I use to trade the big swings during the bull market years 2001++ but now I’m forced to trade much, much more often as everything gets chopped up, short oil this summer was my longest trade this year in a very long time, ughh, every pop up or down with the precious metals sector has been short period trade, DUST was a 6 week position and that’s a long time!
Agree. Buying and holding has not really worked in most of the resource sector, so doing shorter duration swing trades has been the only way I’ve been able to carve out some money to buy that island with. I’m still thinking a Greek island may be ideal….and on sale.
Well, if Gary thinks oil is going down again to 40…will gold follow as doc says…???
Not $40. Maybe back to $44 to $47 once the daily cycle tops. And it may make it to $52 -$54 before it tops.
It’s unscientific but in my recent experience, the dumb money has remained quite bullish. When you hear “buy, buy, buy” after the recent declines it’s not a good sign. Also, the belief in the “need” for a blow off is pretty widely held and, in my opinion, a little strange.
Remember that when most professionals agree, they become just as much a contrary indicator as the dumb money. We saw this very clearly in the summer of 2009 when dozens of pros remained bearish and short stocks.
However, this isn’t ’09 and I can see why it is possible so I’m not ruling it out. I would just need more evidence before I could consider it to be likely.
I’ll still trade my positions off the chart indicators I use vs any measure of bullish, bearish or COT readings they are never a leading indicator just as using a weekly chart or monthly as a read but never a trade indicator, Gary is off track!
I agree, but an investor that doesn’t to be very active can do very well trading the weekly chart -especially within a strong trend.
the KEY is a strong trend…we traders live for those up or down!!
Agree JJ.
The COT readings can be very misleading as one never knows the exact setup of these traders. They are a nice complement to work, but I would not rely on them too heavily.
Stocks should rise for at least a few weeks:
http://schrts.co/ba1fi8
I don’t trust unscientific guesses. I follow actual sentiment. And that shows retail traders are very bearish on the stock market. Heck everyone here except me and Cory thinks stocks have entered a bear market. That should tell you that bulls are the contrarian play right now.
To say “everyone here” is also unscientific and no different than what I said my experience has been.
Among professionals, you have plenty of company. Jim Puplava for one and probably Martin Armstrong as well. Both are widely followed by the smarter part of the retail crowd.
Like I said, I’m open to the possibility but there is a lot of technical damage that must be overcome.
The recent Armstrong conference I attended was 90% BIG hedge funds not retail sheeple who can’t alter ANY market
A consensus among giants (and I am not saying one exists) can be even more dangerous than a consensus among sheeple. As for his conference attendance, I am not surprised if few of his retail followers were there, but that doesn’t mean they don’t exist.
His blog is just the tip of the iceberg compared to his metals report and conferences, its the big position holders that move markets not anyone here as the bottoms and the tops are created by the sheeple getting fleeced by the big players at every major turning point.
I agree with all of that but you still don’t want all the pros to be in agreement (again, I am not saying they are or aren’t).
‘I DO NOT trust the technical”………says Gary
FFM – Let’s talk some fundamentals then…..but on Platinum and Palladium, since I know you like the PGM sector:
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Glencore shuts Eland platinum mine, cuts 970 jobs
Published: Oct 7, 2015 5:30 a.m. ET
Platinum Industry Shakeup Sees Sibanye Go From Zero to Top 3
October 6, 2015 — 12:04 PM CDT Andre Janse Van Vuuren Kevin Crowley
Here’s an article from last week but still relevant to PGMs.
Is Barron’s Palladium Bet Half-Baked? See Stillwater Mining (SWC) Stock
ByBruce KamichFollow | 09/28/15 – 05:00 PM EDT
Here’s an interesting thought from the article posted below. I’m a fan and shareholder (currently a slightly underwater bag-holder) of Platinum Group Metals (PLG) that he mentions:
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9. Physical Platinum and Platinum Group Metals (PLG)
by Peter Leeds
“My expectations are also for inflation to rise, which makes all precious metals more popular as a store of value. In fact, all the currency debasement and money printing nations all over the world have been engaged in over the last few years is the definition of inflation. The U.S. dollar has lost over 95% of its purchasing power since 1913, and that trend has been accelerating very much since quantitative easing began a few years ago.”
“Ideally, investors should purchase physical platinum. I would not suggest owning any platinum-related ETFs. If individuals prefer stocks, Platinum Group Metals (PLG, NYSE) is one example for a long term hold, but there are numerous issues with any vehicle that trades publicly, which are not risks for commodities.”
– That was taken from the Article:
10 Best Stock Buys Of The Decade From 10 Investment Pros
OCT 3, 2015 @ 10:01 AM – Forbes
YAHOO NEWs………….?….any ratings from these jokers , I take with a grain of salt.
although you know something about Stillwater runs deep…….
NO. 2………..SIX YR. LOW…………..South Africa…….shaky area politically, but, A.L.has the skinny on that one, so, we should have him do some research.
BOOTS on the Ground………best info. imo
Agreed. Some of the articles we posted a few months back got into the new plan to use robotic mining where applicable to do many shallow pits, versus the deep pits in S. Africa. Platinum Group Metals is building out their mine at present and they are definitely utilizing technology to control costs, and deal with less strikes and union b.s.
I remember reading on the robotic mining……good thoughts………..
ok…………..GRIN AND BEAR IT………new motto……………………ccf
Thanks for the article NO.1……read, and think long term there is money in the vein…
NO. 4………..GREAT ARTICLE …..PLATINUM , in top ten at number 9……notice is says……”platinum usually twice the price as gold, historically”( or close to those words)
REALLY APPRECIATE THE POST………..thanks…………………………CCF
Yes sir. Longer term, I am a big fan of the PGMs, but with commodities taking it on the chin so often sometimes they get dragged down with the sector. Other times the fundamentals do influence this space with the auto industry numbers (diesel vs gas), S. African strikes and mine closures, and occasionally they trade with Silver and Gold.
For stocks I mostly just trade (SWC) Stillwater Mining (did well recently and trimmed yesterday thank goodness), (PLG) Platinum Group Metals, and (PLM) Polymet.
Here is the list I track, but if you have any other stocks or ETFs you like then please don’t keep it a secret 🙂
Symbol Company Name
AGPPF ANGLO PLATINUM LTD
AGPPY ANGLO AMERICAN PLATINUM LTD
AQPBF AQUARIUS PLATINUM LTD
ELRFF EASTERN PLATINUM LTD
IMPUY IMPALA PLATINUM HOLDINGS LTD
JUBPF JUBILEE PLATINUM PLC
KMRPF KENMARE RESOURCES LTD
LGORF LARGO RESOURCES LTD
LNMIF LONMIN PUBLIC LTD CO
NMPNF NORTHAM PLATINUM PROPERTY LTD
PALDF NORTH AMERN PALLADIUM LTD
PALL PHYSICAL PALLADIUM SHARES
PLG PLATINUM GROUP METALS LTD
PLM POLYMET MINING CORPORATION
PORMF NOVX21 INC
PPLT PHYSICAL PLATINUM SHARES
PTNMF PLATINUM AUSTRALIA LTD
SWC STILLWATER MINING COMPANY
WGPLF WELLGREEN PLATINUM LTD
ZKBPF ZKB PALLADIUM CORPORATION
BTW – The actual deposit that (WGPLF) Wellgreen Platinum has is a monster, and could be a game changer, but the larger investing community seems relatively unaware of what they are developing. I read their press releases, drill results, and they’ve made some positive changes to their board and management. When the sector does rebound, I’ll be adding in a big way to my position in Wellgreen.
Also, I guess I need to add Sibanye to this list as they just became the #3 Platinum mining company in the last month from out of nowhere.
THANKS FOR THE LIST…………………………………THE BOOT, CLAW, OOTB
Let’s talk on the above list, in about 60 day……..I think there will be some more bad news on VW….Glencore…..that shakes the market……JUST THINKING…….CCF
BTW…..I never keep secrets from hard working friends………………JtheLong
Medium to longer term I am not worried about VW sales or auto sales in general, but Glencore shutting a Platinum mine does actually help the supply situation and pricing in a positive way (even though it highlights the weakness in pricing at present).
However on the short term, investors and news anchors do get riled up about auto supply just because of the VW emissions mess. They’re still only 1 company in a global auto marketplace.
Here’s an article from 2 weeks back attributing the slump in Platinum to VW. I believe Pt would have slumped with other commodities anyway, but it’s definitely a factor.
How the Volkswagen Scandal Is Crushing Platinum
By Paul Ausick September 24, 2015 11:20 am EDT
http://247wallst.com/commodities-metals/2015/09/24/how-the-volkswagen-scandal-is-crushing-platinum/
EX……..check out today’s price on palladium down $12, platinum up $10
I look at it this way……….VW, will need to correct the problem of ALL the existing vehicles.
Platinum is affected by diesel cars (VW in Euroland), and Palladium is focused on the gas catalytic converters, so I don’t think VW was affecting Palladium today.
OK – I axed Platinum Australia Ltd, but added African Rainbow Minerals and Sibayne Gold. There are other base metal companies like Ivanhoe, Norilsk, and Antofagasta that have a big PGM credit, but it isn’t their main focus, so I classify them as commodity conglomerates.
Here is the improved list of Platinum & Palladium Miners.
AFRBY AFRICAN RAINBOW MINERALS LIMITED
AGPPF ANGLO PLATINUM LTD
AGPPY ANGLO AMERICAN PLATINUM LTD
AQPBF AQUARIUS PLATINUM LTD
ELRFF EASTERN PLATINUM LTD
IMPUY IMPALA PLATINUM HOLDINGS LTD
JUBPF JUBILEE PLATINUM PLC
KMRPF KENMARE RESOURCES LTD
LGORF LARGO RESOURCES LTD
LNMIF LONMIN PUBLIC LTD CO
NMPNF NORTHAM PLATINUM PROPERTY LTD
PALDF NORTH AMERN PALLADIUM LTD
PALL PHYSICAL PALLADIUM SHARES
PLG PLATINUM GROUP METALS LTD
PLM POLYMET MINING CORPORATION
PORMF NOVX21 INC
PPLT PHYSICAL PLATINUM SHARES
SBGL SIBAYNE GOLD LTD
SWC STILLWATER MINING COMPANY
WGPLF WELLGREEN PLATINUM LTD
ZKBPF ZKB PALLADIUM CORPORATION
I guess if Sibayne Gold got added that Norilsk should be able to be added though.
Gary have you got a chart of the surge in the ARMS index compared to 2002 and 2009?
Gary is probably right that oil has put in a three year low but either way, it looks like it’s going higher from here.
http://schrts.co/SjBFCO
I have a feeling Oil will bump it’s head on that 20 day MA and revert down before the next leg up.
Do you expect a new low? Based on the oscillators, etc., I think it will reach at least $55 and probably more like $60 before we see a reaction.
Another look:
http://schrts.co/lPQYBX
OK I see your point on the chart trend line being where WTI bounced, and see the 2 big volume spikes you highlighted in the green box. Oil may very well tear on up to $55-$60 to that next line of resistance.
However, I can’t seem to shake the thought process that the commodities will still have one last leg down Oil, PMs, base metals, and in that scenario I could see Oil going back and at least testing the recent low on more time in a “W” shaped recovery.
There are a number of prior peaks and points of interest near $55, so I could see first resistance being there, then about $62. For the short term the 20 day MA a little north of $50 could reflect the move up (and it did today for exampe). If it breaks though, $55 is the next stop.
Yes Mike from Albuquerque they did hit gold with about a 6000 contract dump this morning. It may slow gold down for a bit But I don’t think they will be able to turn the larger trend back down now that the CRB has confirmed the 3 YCL. This was most likely just ashort term fleecing for anyone buying the breakout this morning.
Gary-
I would not give up on your 7 YCL yet. I am not sure why you are as nothing has changed to think otherwise. Heavy distribution, heavy tape. The market bottomed temporarily where it should have and has now bounced. There is no indication of additional QE programs with stock market manipulation. It was a vicious sell-off of over 10% in 3-4 days!
Actually there are quite a few indications that the rest of the 7 YCL is not going to play out. One is the sentiment that I discussed. Another is the COT reports. Antoher is the abbreviated daily cycle low at the retest and then the powerful thrust higher. And finally the market broke the intermediate trend line. That shouldn’t be happening if the market was going down further.
At this point I have to give the benefit of the doubt to the bulls unless the market can prove it wants to go down. And by that Io mean a move below last Tuesday’s low. One simply can’t short until that occurs and I have my doubts it will.
Thanks for the response Gary. Very good points. Many indicators are skewed heavily in the bullish case; however, price for me is most important. For this reason, I am of the other camp. Most everybody will be looking at SPX 2020 and 2040. The question remains what to do at and before these levels. I personally am legging into SPY and other various put options right here, right now as this bounce completes my targets. I agree with overweight gold mining shares, as I continue to believe they are reflecting a gold price of around $750, which means if gold can rally to $1,400 or $1,500, they should do exceptionally well. I will hold all mining share positions and trade around them with options to enhance leverage. I am not making a long term bullish call on the gold yet. I still believe it will be capped at $1,550 area for quite some time.
Gold YTD support-resistance really simple..$1100 held…$1117 left behind…$1147 still resistance and so on
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=10&dy=0&id=p21553530824&a=426781351&listNum=1
This..? For a down market…?
Jim Sinclair’s Commentary
Anyone remember the exposure to Lehmans? Not counting of course the derivatives…
As A Shocking $100 Billion In Glencore Debt Emerges, The Next Lehman Has Arrived
Submitted by Tyler Durden on 10/07/2015 – 11:27
THANKS Agatha………lot going with Glencore……
FOMC minutes released Thursday afternoon, lets remember the Sept 17th FOMC meeting was what started the rise off $1100 so a Dovish minutes release could be the fuel needed to close above $1147 and take on $1169…$1205….$1232
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=10&dy=0&id=p30742647110&listNum=1&a=426781351
The First Crack: Deutsche Bank Preannounces Massive Loss, May Cut Dividend
Submitted by Tyler Durden on 10/07/2015 – 16:20
Amid numerous rumors that Deutsche Bank is among the corporations exposed to the VW fiasco, and to be clear there is no news to confirm that, DB has just kitchen-sinked it in a pre-announcement:
*DEUTSCHE BANK SEES 3Q NET LOSS EUR 6.2 BLN
*DEUTSCHE BANK TO RECOMMEND DIVIDEND CUT OR POSSIBLE ELIMINATION
Deutsche Bank stock is trading down around 6% after-hours.
I seriously hope they get their act together over there Agatha.
Bank of America says banks may have $100 billion in exposure to Glencore
By Mark DeCambre Market Watch
Published: Oct 7, 2015 3:53 p.m. ET
5 3 7
Bank of America sees U.S. banks saddled with $100 billion in exposure to troubled mining giant Glencore
Time (BST)
Glencore PLC
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10/07/2015 10:56 AM to 10:57 AM BST
●UK:GLEN122.25p
115.0p117.5p120.0p122.5p125.0p127.5p130.0p132.5p
Embattled commodities giant Glencore PLC could prove a $100 billion elephant in the room for some of the biggest U.S. banks as they report quarterly results and undergo tests of their financial health in the coming months.
The hefty sum comes from a Wednesday research note from Bank of America Merrill Lynch that assesses the exposure of banks to Glencore.
Debt from the mining-and-commodities trading firm could deliver a jolt to the financial sector, if the giant miner can’t keep up with payments on its bank loans.
The investment firm doesn’t go into specifics about the banks that could be exposed to Glencore, but says a number of U.S. and European financial institutions provide credit to the miner and other commodity-focused firms. Bank of America points out that financial regulators performing stress test on banks’ abilities to withstand market shocks could be on the lookout for exposures to Glencore and other troubled miners.
Read: Glencore oil deals could bit banks
The Bank of America note comes a day after Glencore GLEN, +5.22% disclosed information about its financial health in an effort to assuage fears that the company is on the verge of being overwhelmed by its debts. Here’s an excerpt from the note below:
We estimate the financial system’s exposure to Glencore at over US$100bn, and believe a significant majority is unsecured. The group’s strong reputation meant that the buildup of these exposures went largely without comment. However, the recent widening in GLEN debt spreads indicates the exposure is now coming into investor focus.
I loaded up more when the S&P was at 1867. I assumed they would not let the market collapse from that critical level.
A wise choice Paul L. I am not confident that level will hold the next time it gets tested though.
Gary, I cannot agree with this call of yours because I think you are getting ahead of yourself on the charts. Yesterday I pointed out where both crude oil and gold should reverse back down and both have been more or less on target (although gold did rise above 1150 which was not in my playbook).
Anyway, what I think you need to look at to change your mind is a longer term chart. Silver for example has had a fantastic run the last days. But pull up a weekly and run a line along the falling channel and guess what….?
All that move did was to create another confirmation that silver is still in a bear market by generating one more point along the peaks of that channel. Its no big deal….no right translation….no bull market about to get underway.
Same thing with gold although there is a good probability it will run up to 1250 in the early part of 2016 and STILL be well within its falling trend channel. So I am sorry to say but you have not convinced me with your case about sentiment, COTs etc.
This is still a bear….still just a traders market.
Gary,
Is this like your previous “the bottom is in & the train is leaving the station” call?
I reminded you way back then….that I’m not aboard because its leaving in the wrong bloody direction to where you want to go…..& it did.
You lost your mojo way back then, you obviously still need to find it.
I hope you do….rather than blame it all on manipulation again.
But thats always the easy out…..hey.
This market is so whacked out….if you dont have a good handle on your emotions (?) you might have to continue your AA meetings to survive…:)))