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Friday, May 31, 2013

Wealth Divide




When people have everything taken away from them and they have nothing left to lose, they tend to become very desperate.  And right now we are rapidly hurtling toward a time of great global instability.  Anger and frustration are growing all over the globe, and the rate at which the gap between the wealthy and the poor is widening seems to be accelerating.  Just check out these numbers...

-The wealthiest 1 percent of the global population now owns 39 percent of all the wealth on the planet.

-According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the planet.

-According to a study conducted by Credit Suisse, the bottom two-thirds of the global population owns just 3.3% of all the wealth.

-A study by the World Institute for Development Economics Research discovered that the bottom half of the world population owns approximately 1 percent of all global wealth.

-It is estimated that the entire continent of Africa only owns approximately 1 percent of the total wealth of the world.

-Approximately 1 billion people throughout the world go to bed hungry each night.
-If you can believe it, more than 3 billion people currently live on less than 2 dollar a day.

In the world that we live in, money equals power.  And the more money that the top one percent accumulate, the more power they will accumulate as well.

So exactly who are the top one percent?  I discussed this at length in my previous article entitled "Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings".

The global elite are absolutely obsessed with power and control and they have been working to implement their agenda for a very long time.  In the end, they hope to unite the entire planet under a monolithic global system that they control.  They are actually quite open about this - it is just that most people do not want to believe it.

The gap between the wealthy and the poor is rapidly growing in the United States as well.  Sadly, this means that the middle class is steadily disappearing as the ranks of those that are living in poverty continues to increase.

But of course not everyone is doing badly in the U.S. right now.  In fact, those that own stocks have had lots of reasons to celebrate in recent months.

So who owns stocks?

Well, the wealthy do of course.  In fact, approximately 60 percent of all individually held stocks are owned by the top 5 percent of all Americans.

During the last recession, Americans lost 16 trillion dollars of wealth.  Since then, about 45 percent of that wealth has been "recovered", but the vast majority of that "recovery" has been due to rising stock prices.  The following comes from a recent Washington Post article...

From the peak of the boom to the bottom of the bust, households watched a total of $16 trillion in wealth disappear amid sinking stock prices and the rubble of the real estate market. Since then, Americans have only been able to recapture 45 percent of that amount on average, after adjusting for inflation and population growth, according to the report from the St. Louis Fed released Thursday.
In addition, the report showed most of the improvement was due to gains in the stock market, which primarily benefit wealthy families. That means the recovery for other households has been even weaker.
“A conclusion that the financial damage of the crisis and recession largely has been repaired is not justified,” the report stated.
Once upon a time, the United States had the largest and most thriving middle class in the history of the world.  That was a great thing.  But now the middle class is being destroyed and government dependence has surged to an all-time high.


The wealthiest 1 percent of all Americans now own more than a third of all the wealth in the United States.

-In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

-According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

-The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.

-On average, households in the top 7 percent have 24 times as much wealth as households in the bottom 93 percent.

-Between 2009 and 2011, the wealth of the bottom 93 percent of all Americans declined by 4 percent, while the wealth of the top 7 percent of all Americans increased by 28 percent.

-The poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.

-The top 0.01% of all Americans make an average of $27,342,212.  The bottom 90% make an average of $31,244.

For much more on how poverty is rising and the middle class is being destroyed, please see my recent article entitled "22 Facts That Prove That The Bottom 90 Percent Of America Is Systematically Getting Poorer".

Obviously we have a huge problem here.

With each passing day, poverty is rising and more people are becoming dependent on the government.

So what is the solution to this mess?


http://www.activistpost.com/2013/05/top-1-own-39-of-all-global-wealth.html#more

Terrorism For Dummies


Triangle Pattern

Charts etc., May 31, 2013The triangle pattern is still containing price action as of 2:30p.m. on Friday.

For as many years (20+) as I've been studying charts, I'm always still amazed when I see price get to a moving average or trend line and pause or react to that level as if it was a hot wire, seemingly confirming that millions of investors are all keenly aware of the same thing. 


Source: Finviz.com
wrote yesterday how the market (S&P 500) was carving out a triangle pattern on the hourly chart. Viewing the updated chart above, one day later that triangle pattern is even more clearly defined, as yesterday the index got exactly to the upper portion of the triangle (1660) only to then roll over. The S&P 500 is currently holding at the lower portion of the triangle, fast approaching the triangle's apex.

In this shorter-term time frame, we are definitely at a key inflection point with the eventual breakout from the triangle formation likely dictating the market's future direction. Stay tuned!

Idiocracy Version X


WGCI Chicago, May 30th 2013.

Americans are all about finding ways to make things easier on themselves, multi-tasking and -- oh yeah -- being lazy. 

So this new invention from Burger King is actually perfect for us! 

The company handed out 50 of these in Puerto Rico to celebrate BK's 50th Anniversary there. Please say they'll be coming to the mainland soon.

Thursday, May 30, 2013

Gold Has A Catalyst

It looks as if we have FINALLY got some sort of catalyst to propel gold through that big round number overhead resistance level at $1400. Based on what I am seeing this morning, it began with the steep slide in the Japanese stock market, with further help from the very disappointing GDP growth number that came out this AM. 

To start - the Nikkei fell 5.2% on Thursday, as investors over there are suddenly having concerns about the overall effectiveness of the "inflation" program that has been implemented by the political and monetary authorities. That fall in stocks resulted in a strong safe haven bid into the yellow metal. Keep in mind, that heretofore investors have chosen to ignore gold or outright sell it short as they put investment capital to work in better returning equity markets. If anything upsets that apple cart and begins to cast the least bit of doubt that the strategy is not going to be effective moving forward, we will see money flow out of stocks.


Secondly - the US economy was revised downward in growth for the Q1 2013 from last month's reading. Instead of the 2.5% reported last month, the number was revised lower to 2.4%. That took some of the steam out of the "TAPERING" talk that has been everyone of late. As most of the readers of this site are aware, gold has been under pressure ever since that TAPERING talk began to gain some credence. Today's revision was a reminder that this economy remains quite weak with tepid growth and is still very susceptible to downward pressure. Growth numbers will need to do more than this to provide any factual basis for a curtailing of the Fed's QE program.

I should further note here that the "deflator" number that was used by the BEA was 1.18%. The BLS has a December-March inflation number of 2.10%! That is no mean difference! The lower the deflator number used (another way of saying this is that the lower the rate of inflation employed by the statisticians), the better the headline number for growth comes in. IF the BLS number had been used instead of the 1.18% reading, the growth reported would have been even lower!

The mining shares are showing some welcome signs of life of late. As you can see on the chart below, they gapped higher today but until this index closes through that gap region indicated, I cannot get too excited about their future prospects. To pique my interest, I would need to see two consecutive closes through at least the 290 level. Still, it beats seeing the things dropping to new lows every day! Obviously value buyers are active but we need momentum based buyers to chase these things like they have chased the broader equity markets. That will require a technical chart confirmation that the trend is ready to reverse.



There was some news out the other day about the US Dollar losing a bit of its demand as the chief currency for global reserves. The IMF data on that was interesting. I do not know if that might have had something to do with the weakness that we saw yesterday and are seeing again today, but for whatever reason, the Dollar just took out at least one downside support level on the chart.

I am using a 4 hour chart as it shows the support level more clearly than just the daily chart. You can see the breach of that level was accompanied by a pretty decent spike in volume which is bearish. The week is not over yet but if the Dollar cannot climb back over that support, odds would favor additional downside early next week.

Don't forget the entire world is LONG DOLLARS and the trade is extremely crowded both among the big hedge funds and the general public. If any more downside technical levels were to get taken out, we could see some pretty serious selling occur in the greenback.

Obviously, any weakness in the US Dollar is going to benefit gold, which is exactly what we are seeing occur so far in today's trading session.

Speaking of gold, clearing $1400 is a big deal on account of that fairly hefty hedge fund short position. We did see some short covering occur on the move through this level. My analysis suggests heavier short covering will occur if the metal can push PAST $1425 with a serious unwind of short positions if price can clear $1440. For analysis purposes, we should start to focus on the August gold contract as the June is entering its delivery period and open interest in that contract month is rapidly dropping. It will also be interesting to note the delivery process itself and see what kind of offtake occurs.

Silver is getting some help from the strength in gold today and the bit of strength in copper is not hurting it either. Until that market clears $24 I cannot get excited about it.

The yield on the Ten Year Treasury note has been all over the place today. Volatility in the US bond markets, while nothing like the madness that has been unleashed in the Japanese government bond markets, is definitely increasing. Interest rates that begin wild oftentimes unpredictable movements have the potential to destroy hedging programs put in place by any entity with interest rate exposure. This is especially true of insurance companies and mortgage companies. Things can get out of hand very quickly and become quite ugly if money flows start getting erratic in that critical sector.

If you want to know how bad it can get, just look at what the Japanese monetary authorities are having to do in order to try to calm the jitters in their bond markets. 

http://traderdannorcini.blogspot.ca/2013/05/gold-catalyst.html

From Russia With Max


Embarrassing Chart

Harold Pollack, Wonkblog, May 29, 2013.

When it comes to drugs, it’s all about prices.
The ability to raise prices is– at least is perceived to be–a critical function of drug control policy. Higher prices discourage young people from using. Higher prices encourage adult users to consume less, to quit sooner, or to seek treatment. (Though higher prices can bring short-term problems, too, as drug users turn to crime to finance their increasingly unaffordable habit.)

An enormous law enforcement effort seeks to raise prices at every point in the supply chain from farmers to end-users: Eradicating coca crops in source countries, hindering access to chemicals required for drug production, interdicting smuggling routes internationally and within our borders, street-level police actions against local dealers.

That’s why this may be the most embarrassing graph in the history of drug control policy. (I’m grateful to Peter Reuter, Jonathan Caulkins, and Sarah Chandler for their willingness to share this figure from their work.) Law enforcement strategies have utterly failed to even maintain street prices of the key illicit substances. Street drug prices in the below figure fell by roughly a factor of five between 1980 and 2008. Meanwhile the number of drug offenders locked up in our jails and prisons went from fewer than 42,000 in 1980 to a peak of 562,000 in 2007.
embarrassing drug graph

Wednesday, May 29, 2013

Sameses


Rand Paul Unplugged


EVIL MARKET

Falling Off A Cliff

May 28, 2013, Don't Ignore This Chart!, Arthur HillAlso note that Munis are setting up a massive potential H&S top. However, junk bonds are still chugging along....

The Utilities SPDR (XLU) and the 20+ Year T-Bond ETF (TLT) both peaked in early May and declined sharply the last four weeks. The Real Estate iShares (IYR) continued higher into mid May, but peaked last week and fell sharply the last four days. Interest rate sensitive issues are not having a good time right now. 

130528perfa

Tuesday, May 28, 2013

Why Is The Earth Called "Earth"?


More Bad News Means More All Time Highs In The Markets!!!!!!!!!!!????????????



Nothing Matters Except Central Bankers


Welcome back to the trading week in the U.S. after the three day holiday.  Last week was an outlier of sorts – a glitch in the matrix if you will – as there was actual selling post Wednesday morning when a Q&A with Mr. Bernanke went off script and had people worried the punch bowl could be taken away sometime in our lifetime.  (People continue to misunderstand what the Fed is telling us, see last point here)   This led to only the 3rd "correction" of 2013 as noted in the yellow shade below, and highlights again the only thing that matters to markets anymore are global bankers' words, actions, or threats of actions.
A typical year has three 5% corrections, one 10% corrections (with a 20% correction thrown in every ~3 years).  Of course this year there has been zero 5% correction, not to mention any of the other sorts.  All three episodes thus far (late Feb, mid April, and last week) have been of the 3-4% variety from peak to trough.  Last week's was so quick it doesn't seem possible it was 3% but from Wednesday's highs to Thursday's low a quick 3% was shaved off the S&P 500.  Of course that was with readings of extreme overbought on weekly and monthly time frames but as we know, overbought can stay overbought for a long time especially with central banker influence.
Of course the DJIA has not been down 3 days in a row for now over 100 sessions.  It threatened to Friday but a flurry of buying in the closing moments lifted that index (AND ONLY THAT index) into the green – remarkable.  :)
As for today's record?  It is the "20 for 20" Tuesday – that is 20 Tuesdays in a row up.  Barring a huge reversal as we saw last Wednesday, with futures screaming up it seems like we will be talking about 21 next week.
Bigger picture in the old days pre QE we used to go and fill index gaps most of the time within 2-4 months.  There are now all sorts of gaps left over from the November 2012 run but it is well past 2-4 months.  So things are certainly different in a QE regime, and a lot of old rules simply don't matter with the global infusion of liquidity.
In terms of sector rotation last week was a bad week for utilities mostly (and REITs which are not a S&P sector per se but a widely followed group).  Both these groups have yield as a common denominator so whatever the market interpreted in Ben's words caused a lot of damage in these two sectors – note the huge volume spikes.  Materials and technology also took some hits, while money rotated into staples, healthcare, and the lagging group of energy.
Other than that we'll have some minor economic data this week – as it has been for much of the past month+ almost all of it will be absorbed as positive because good news = good news and bad news = more central bankers.  The only thing that has even weakened the market intraday since late April is when a Fed hawk comes out and squeaks a little about "tapering this" or "tightening that".  Again for now, in this market, in this era, at this moment – nothing matters but central bankers.  Until that changes all analysis over and above that is moot.
The only other thing to note is Japan's market did finally come in a bit the past week after going parabolic.  But the yen has fallen again today and the Nikkei bouncing so we'll see if "that was it" in terms of their correction.  All the 10% type of correction did was pull the Nikkei back to the big round number of 14,000 and from there a bounce to the 20 day moving average.

Monday, May 27, 2013

Goldilocks 2.0


The Fed, QE, the Economy and Goldilocks 2.0

It was never easy being a central banker and the job has become much more difficult over the course of the last five years or so, but right now the task of guiding monetary policy and juggling the myriad of threats to economic stability is particularly daunting.
Take the Fed, for instance. The current policy statement calls for $85 billion of bond purchases each month, until the unemployment rate is below 6.5%, as long as inflation expectations do not rise above 2.5%.
At some point, however, the Fed will have to taper its bond purchases and ultimately begin selling some of its bond holdings. The big questions surround when to begin reversing course and how dramatic the increments will be in those policy changes.
With the unemployment rate and rate of inflation highlighted as the key data points for determining the timing and magnitude of the policy changes, the task of slowing and ultimately reversing the quantitative easing policy seems reasonably straightforward, at least in theory.
One big problem is that the unemployment rate may not be a very good gauge of the health of the economy. The chart below shows economic data reports relative to expectations over the course of the last 3 ½ years. Note that up until about a year ago, there was a very strong correlation between the performance of the S&P 500 index and whether economic data beat or missed consensus estimates. The correlation resumed when economic data turned up in the end of September, but a new divergence arose when economic data began stalling about two months ago, while stocks have been making new highs.
[source(s): various]
Looking at the five components of the economic data, one can see that for the past eight months or so there has been a favorable trend in housing/construction, employment, the consumer, and prices/inflation. As the graphic below illustrates, the one category that has been consistently missing expectations, particularly over the course of the last five weeks, has been manufacturing and general economic data, a category that includes reports such as GDPISMIndustrial Production, Capacity Utilization, Durable Goods, Factory Orders, Regional Fed Indices, Productivity, etc.
[source(s): various]
The problem for the Fed is that even though even though the consumer, housing / construction and aggregate unemployment rates all suggest an improving economy, the manufacturing sector and employment measures such as the labor force participation rate (official BLS graphic) paint a picture of continuing economic weakness.
As an investor, one has to guess how the Fed will handle this evolving conundrum. My general sense is that bulls will be rewarded if the economic data continue to fall slightly short of expectations and help to persuade the Fed that maintaining or perhaps even increasing bond purchases is the best policy approach – all of which should be a positive for stocks. Should economic data, particularly the employment component, begin to top estimates on a regular basis then we are left with the likely conclusion that the Fed will begin to remove the QE safety net relatively quickly. At the other end of the spectrum, if data fall well short of expectations going forward, the more perplexing conclusion is that even with its expanding toolbox, efforts by the Fed to prop up the economy are having at best a temporary effect and are also demonstrating diminishing returns. For investors, the data sweet spot going forward – or Goldilocks zone, if you will – is likely to be a series of near misses that extends the current policy indefinitely.

Saturday, May 25, 2013

Fiat End Game


Does This Pullback Have Legs?

Ryan Detrick, Schaeffer's Trading Floor, May 24, 2013

The SPX recently spiked above the upward channel that it has been trending in since this rally started in November.  Just as quickly, it has pulled back inside the channel.  I do have my concerns that breaking out of this channel was a last hurrah for the bulls.  When coupled with the Russell 2000 rejected at the 1,000 area, there are some warnings in the charts for the first time in months. 

Could we be looking at the well deserved pullback that so many have been calling for since February?




At this point, a moved back down to the lower channel and 40-day moving average could be perfectly normal and healthy.  That lower channel is down at 1,600 and would represent a pullback of about five percent based on current levels.  This makes sense, but if we go much beneath that then things could be uglier.  Let’s pass that bridge when we come to it.

When you see things like the Investors Intelligence poll showing 54.2% bulls (highest since February), the AAII poll showing bears down to just 21.58% (lowest since February ’12) and multiple bullish magazine covers (I’m looking at you Barron’s and The Economist), it makes sense to take a step back and re-evaluate things.  At the start of the year, things looked much more bullish and fortunately that has played out perfectly.  But all rallies will end eventually.  This isn’t the end of the world, nor is it the end of the bull market.  I do believe by the end of the year we’ll be well above the recent highs we just set.  Still, as a trader, you have to always be open to anything and things are cloudy out there right now. . . .

Thursday, May 23, 2013

Hilariously Bad Ads That Were Rejected


Hilariously Bad Ads That Were Rejected


Originating in the UK, the annual Chip Shop Awards is an international creative award for un-used advertising ideas that celebrates creativity with “no limits”.

“The Chips is all about ideas. Your work does not have to have been broadcast, printed or mailed. The Clients doesn't have to be yours. You just need a brilliant idea”

This results in some hilariously bad ideas that don’t meet with the client’s approval—mainly because they are politically incorrect, insensitive, offensive or just in bad taste.



























[via Chip Shop Awards, via Business Insider]

Bearish Outside Candle

Putting in a Bearish Outside Candle Today, by Mark Hanna, Market Montage,May 22, 2013

In the days before Japanese candlestick charts were ever heard of in the Western hemisphere, this formation used to be called a Key Reversal Day, and it deserves close attention because it has marked many a turning point in the markets. Reviewing the rules for an old-fashioned Key Reversal Day (after an uptrend):    
Today's open must be above the previous day's close (it was, but just barely);
Today must make a new high;

And today's close must be below yesterday's Low.
This was a response to one sentence from Bernanke: "If we see continued improvement and we have confidence that that is going to be sustained, then we could in -- in the next few meetings -- we could take a step down in our pace of purchases."  This demonstrates just how addicted the market has become to  QE and what the consequences will be when it is withdrawn.

Especially in light of AAII investor sentiment simultaneously reaching a bearish extreme, this could well be the beginning of the long-awaited correction....

The indexes along with a host of stocks are putting in a bearish outside candle today (over yesterday's highs and below yesterday's lows).  Typically this is … well bearish.  But in the QE era when a technical signal screams bearish it has tended to be completely forgotten within a few days, causing those who follow it to get squeezed if you are short or left behind if you go to cash.  This is the difficulty of the current market – QE causes it not to behave as normal.  In the "old days" today would be a day to take major note of.
The RSI I noted at an extremely rare 75 this morning, is now down to 63 …

Wednesday, May 22, 2013

Portfolio Manager Strategy Cycle

pm_strategy_cycle

Being Swedish


Best Kept Secret of Dollar


Sold on Solar?

John Aziz, The Week, May 21, 2013.  We've been hearing this mantra for a long time now, but in fact, photovoltaic panel prices have fallen from $4 per watt in 2008 to $0.75 per watt last year to just $0.58 per watt today. If this trend continues, solar generated electricity will be fully competitive with coal and nuclear between 2015-2020.

The total solar energy hitting Earth each year is equivalent to 12.2 trillion watt-hours. That's over 20,000 times more than the total energy all of humanity consumes each year.
And yet photovoltaic solar panels, the instruments that convert solar radiation into electricity, produce only 0.7 percent of the energy the world uses.
So what gives?

For one, cost: The U.S. Department of Energy estimates an average cost of $156.90 per megawatt-hour for solar, while conventional coal costs an average of $99.60 per MW/h, nuclear costs an average of $112.70 per MW/h, and various forms of natural gas cost between $65.50 and $132 per MW/h. So from an economic standpoint, solar is still uncompetitive.

And from a technical standpoint, solar is still tough to store. "A major conundrum with solar panels has always been how to keep the lights on when the sun isn't shining," says Christoph Steitz and Stephen Jewkes atReuters.

But thanks to huge advances, solar's cost and technology problems are increasingly closer to being solved.
(Bloomberg & New Energy Finance)

The percentage of light turned into electricity by a photovoltaic cell has increased from 8 percent in the first Cadmium-Telluride cells in the mid-1970s to up to 44 percent in the most efficient cells today, with some new designs theoretically having up to 51 percent efficiency. That means you get a lot more bang for your buck. And manufacturing costs have plunged as more companies have entered the market, particularly in China. Prices have fallen from around $4 per watt in 2008 to just $0.75 per watt last year to just $0.58 per watt today.

If the trend stays on track for another eight to 10 years, solar generated electricity in the U.S. will descend to a level of $120 per MW/h — competitive with coal and nuclear — by 2020, or even 2015 for the sunniest parts of America. If prices continue to fall over the next 20 years, solar costs will be half that of coal (and have the added benefits of zero carbon emissions, zero mining costs, and zero scarcity).

Scientists have made huge advances in thermal storage as well, finding vastly more efficient ways to store solar energy. (In one example, solar energy is captured and then stored in beds of packed rocks.)

Lower costs and better storage capacity would mean cheap, decentralized, plentiful, sustainable energy production — and massive relief to global markets that have been squeezed in recent years by the rising cost of fossil fuel extraction, a burden passed on to the consumer. All else being equal, falling energy prices mean more disposable income to save and invest, or to spend.

The prospect of widespread falling energy costs could be a basis for a period of strong economic growth. It could help us replace our dependence on foreign oil with a robust, decentralized electric grid, where energy is generated closer to the point of use. This would mean a sustainable energy supercycle — and new growth in other industries that benefit from falling energy costs.

Indeed, a solar boom could prove wrong those who claim that humanity has over-extended itself and that the era of growth is over.

She Is Having A Crappy Day

http://i.imgur.com/MsRgpPg.jpg

Time To Be Brave

I used to half joke with some of my investing friends that the best time to buy stocks is during or right after a crash.  Think 1987, 2000-2002, 2008-09, and now perhaps Gold Miners?? Well, before we get too far ahead of ourselves, lets examine evidence of a “Crash”: I like to use crowd behavioral, empirical, and technical evidence in combination.
1. In a recent money managers poll, virtually nobody was bullish on Gold or Gold stocks, and over 80% of those polled were bullish on the SP 500 and US stocks.
2. The percentage of Dumb Money traders (non-reportable traders) in the futures markets with short positions on Gold is at all time highs, they tend to be very long at the highs and very short at the lows.
3. The insider buying ratio of Gold Mining stocks to sellers is running over 10 to 1, the highest since October 2008 when Gold bottomed out at $685 per ounce from $1030 highs.  Quoting Ted Dixon, CEO of Ink Research, “such a high level of buying interest among officers and directors within their own businesses in the resource sector has correctly foreshadowed a recovery in share prices in the past: That high point of nearly five years ago came about six weeks before the Venture market bottomed on Dec. 5, 2008…While the excitement that surrounded mining stocks as recently as two years ago has waned, experienced value investors recognize that such periods of investor neglect often give rise to the best deals” Source: Theglobeandmail.com
4. The ratio of the HUI Gold Bugs Index to the SP 500 is at multi year lows and in near crash mode on the charts. The RSI Index (Relative strength) on the weekly charts is at 10 year lows at -13.71, which is off the charts low!!
5. Most trading message boards I view at Stocktwits and others are universally bearish on Gold and Gold stocks.
6. Gold is in a wave B or Wave 5 down re-testing the 1322 lows which we have discussed here for weeks as very likely if 1470 was not taken out on the upside… this is a normal sentiment pattern and re-test.
7. Gold has been in a 21 Fibonacci month correction pattern off a 34 Fibonacci month rally from 686-1923. In August of 2011 I penned articles from 1805 right up to 1900 warning of a massive wave 3 top forming.  Everyone was bullish, now it’s the complete opposite.
8. Currency debasement continues around the world with negative real interest rates. This is bullish for Gold once this correction has run its course.
9. Hulbert Digest Gold Sentiment index is at an all time low (gold newsletters at -35 sentiment readings!!)
10. Gold -Silver put to call ratios are at all time highs
I could go on and on with headlines and such, but you get the idea.  This is the same type of sentiment I wrote about on the stock market on Feb 25th 2009, here  is that article... and nobody on the planet was bullish.
Below is a chart showing the Bullish % index for Gold Miners, as you can see the last time we were at 0% was late 2008 when Gold had bottomed out and insiders were also buying like crazy like now:
The GLD ETF chart also shows a likely re-test or slightly lower of the 1322 futures lows of April, when Insider buying hit 10 year record levels:
Obviously Gold could end up going a lot lower than we think, and the Gold Mining stocks could sink further yet. But for those with a 3-6 month horizon, we expect the 21-24 month Gold correction to complete by no later than October 2013.  During the next several months the opportunities to buy some miners on the cheap will potentially make some investors a lot of money in the coming few years.


Tuesday, May 21, 2013

Double Bottom For Gold


For gold bugs out there, 2013 has been a year to forget.  With the commodity down 17% year to date, there are not many asset classes that have done worse.  That being said, today's rebound in the price of gold from early morning declines has gold bulls out there hoping that the commodity is beginning to rally out of a double-bottom formation that could set the stage for some better times ahead.

Job Market of 2045


Soy Beans?

PeterLBrandt, May 20th, 2013. Smells like SM to me.

But it is up to you to figure out what the market is.

Once every few years a market sets up whereby the fundamentals harmonize with the longest-term chart, which harmonizes with the weekly chart, which harmonizes with the daily chart.

The quarterly chart shows that this market completed a 34-year base in 2008.
5.20_quarterly
The weekly chart shows that the market formed a 42-month triangle that retested the massive 34-year base. This triangle was completed in 2012.
5.20_weekly
The decline since September 2012 has served as a retest of the completed triangle. The daily chart displays a possible 8-month continuation rounding bottom pattern. A decisive close above noted upper boundary of this pattern would set the stage for a magnificent bull trend. The target of this market set up would be a move equal to $17,000 per futures contract.
5.20_daily