Congrats Roadrunner. I wont make 20k until around 2023.
Rather listless day for PM's. Some would say they were strong relative to equities, but I still cant get excited about the possibilties of a breakout to the upside. Just not seeing it. I suppose I could make an arguement for a chance at an $80 rally , but an $80 drop is just as likely, so why bother? Still long ZSL. Short YEN, EURO, $AUD. Have puts on 2 equities--GMCR, (looking great today), and a restraurant--avocados are expensive.
<< <i>Speaking of fractal energy, how have the calls been from Nichols over this past year? As I recall he was on the wrong side of the market just before a previous dump. >>
His method is pretty good at predicting the timing and duration of big moves but the direction is always the tough part, which is why I use lots of different indicators including my own fractal indicators. Yesterday was kind of a warning for what is developing this morning. Interesting that SP500 is stable while PMs have declined this morning.
I'm headed to Australia in 2 weeks so I hope the AUD/USD continues to fall. It will be interesting to see how it has changed over the past 5 years.
I was disappointed I didn't get to really talk to any native Frenchies while I was there, although I didn't expect to hear anything I didn't already know. Although the foreign media did seem to discuss the whole Greek and Euro situation a little more honestly than they do here.
<< <i>I'm headed to Australia in 2 weeks so I hope the AUD/USD continues to fall. It will be interesting to see how it has changed over the past 5 years.
I was disappointed I didn't get to really talk to any native Frenchies while I was there, although I didn't expect to hear anything I didn't already know. Although the foreign media did seem to discuss the whole Greek and Euro situation a little more honestly than they do here. >>
Interesting comment. I seem to feel that we "get it", much more than the French do. We know they are FUBAR, yet they bury their heads. Or do you mean that the Media here is mostly glossing over the European problems?
Im sure you will be amazed at what has changed in Aussieland over the last 5 years. I would be interested of your opinion of whether you thought the growth was sustainable.
I have a friend in the banking business in Switzerland who is buying a house there for $1 million Euro. He is using, and is allowed to, use his retirement plan as a downpayment. I told his this is a classic sign of a top. He was bewildered, which amazed me as he should know better. But my thought is if prices are so high that people must use all their savings to purchase a home, then prices cannot go higher, as those prospective future buyers will need to use all their savings PLUS more, to buy a house. Incredibly unsustainable. And im afraid the real estate market in Australia is at a similar point. I'd really like to know your opinion of this since it your area of expertise and you have experience with the USA RE bubble.
Cohodk, I hope I get to talk to some Aussie locals who can speak about the real estate market... this trip is 100% vacation so it's hard to say who I will encounter.
On another note...
The breakout move that I've been anticipating still hasn't come, but still can come just about anytime - there is plenty of energy in the patterns of both SP500 and gold so the next short-term move will likely be large and should come any day now.
McLellan looks at a number of factors and his latest report is anticipating a nice bull market for stocks for the remainder of the year into January. He believes that the October low is already in. So as gold has been fairly direclty correlated to stocks, I have to suggest that gold will do well also. He also had some comments about the USD and made a good case that the bull run in the dollar that we saw recently is temporary and will be short-lived, which also bodes well for PMs.
He did note some possible danger for gold due to the fact that real interest rates are below -3% and that gold hasn't done well in the past when this was the case because "the more ridiculous that a negative real interest rate situation gets, the more likely somebody is going to decide to do something about it. We are way past the time for the Federal Reserve to start raising short term rates to combat the almost 4% inflation that the US is experiencing..." which I think most of us agree with.
He also noted some negative signs for XAU (gold stocks), "the XAU has broken its long uptrend line and now rebounded back up in an effort to test the resistance that it might now offer. That is not a good sign for gold stocks, especially when we see that the lows earlier in 2011 also stand ready to act as resistance." He does note that the XAU is oversold at the moment (according to his indicators) and this is positive.
Some of the tops and bottoms that are being predicted are coinciding roughly with the date next week when we get more details about the European bailout... next week will be volatile.
there is plenty of energy in the patterns of both SP500 and gold so the next short-term move will likely be large and should come any day now.
Agreed 100%. There is a very sizable move coming in PMs and equities and currencies.
He also noted some negative signs for XAU (gold stocks), "the XAU has broken its long uptrend line and now rebounded back up in an effort to test the resistance that it might now offer. That is not a good sign for gold stocks
We were on this over a month ago. Traders should have sold in mid-Sept. as warned.
He does note that the XAU is oversold at the moment (according to his indicators) and this is positive.
My momos dont show anything even remotely considered oversold and are only halfway thru the cycle. In fact, the 3rd leg down may have started this week. Looks like another 15% downside.
Regarding todays activity, GLD appears to be breaking the uptrend from January. The 200dma ($150) is the likely target, however an overshoot is possible considering it has not traded below the 200dma in almost 3 years. $140 would be the target as this is a 38% retrace of the move off the 08 lows. A 50% retrace would target 127 which is also the Jan lows and I think pretty good support. Personally, im not a stacker until gold gets closer to this level.
Maybe for a short term move, but not for a multi-year uptrend.
McLellan provided a chart of the COT traders report for dollar index futures vs. the dollar index, and whenever the short position as a % of open interest gets over 20%, which is it now (currently about 28%), it always leads to a fall in the USD index, although it can stay this way for a few more weeks or longer. And I'm not suggesting new lows, just perhaps to the lower 70's again. You're also fighting a fed that wants to weaken the dollar, not strengthen it. Good luck.
The dollar is pretty low now and sentiment is and has been extremely bearish for a long time. We can only hope the dollar hasnt bottomed. Basically we are watching the Euro vs the dollar. Which currency has the strongest legs? The Cando and Aussie and Norwegian Krona will trade off this relationship. After the bombing of Pearl Harbor, Japanese Admiral Yamamoto is believed to have said, "I fear all we have done is to awaken a sleeping giant." The US dollar is that giant. I am short the Euro.
I also believe the FED is POWERLESS in controlling the dollar. Evidence in the last 3 years. Or in Japan's ability to manage the YEN. The global economy and markets are MUCH larger than the FED and all other CBs combined and control the broad scale of currencies, while CBs just react to these movements. Im not sure there are enough trees in the world to make paper to satisy dollar demand. Of course im overemphasizing, but I feel strongly about this.
GLD at critical support--low closing prices and 150dma.
<< <i>I also believe the FED is POWERLESS in controlling the dollar. Evidence in the last 3 years. Or in Japan's ability to manage the YEN. The global economy and markets are MUCH larger than the FED and all other CBs combined and control the broad scale of currencies, while CBs just react to these movements. Im not sure there are enough trees in the world to make paper to satisy dollar demand. Of course im overemphasizing, but I feel strongly about this. >>
The fed is not powerless but they are down to just one bullet - the printing press.
The problem with your arguments is that the US offers negative real interest rates, and until they raise rates the dollar will remain unattractive. OF course, as you mention many other currencies aren't looking so hot either, but that's about the only thing the USD has going for it. ---- I agree gold at critical support. If it can't hold $1600, look for $1400's...
The dollar is at an interesting crossroads. As Europe is "at the brink" the dollar has actually given up all of its gains the past six weeks. The euro with all its warts has managed to strengthened against the dollar. Interesting times we live as we watch this thing play itself out. Beating against the dollar has payed off for a long time pretty much no matter what currency you played against it. Now I wonder what train will leave the station..........usually the trend is your friend, until it isn't anymore. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Gold accomplished a 38.2% rebound from the drop this week. So the question really is where it goes from here. If it continues higher, the outlook is positive.
SP500 did well also, looks like a breakout. If the breakout holds (not a false breakout), then we really should be in the clear for a rally for the rest of the year.
Now since I believe the SP500 and gold are still fairly-directly correlated, I think this bodes well for PMs as well. If gold heads higher earlier next week in conjunction with SP500, I say go long and go big...
Miners took their drubbing on the 4 days leading into today's OE. No one waits for "the" actual day anymore. With gold, silver, and copper OE occurring next Wed, expect to see some weakness by Tuesday. A typical scenario is a strong 1st half Monday and then the whacking begins. It might even hold off until late Tuesday morning but I doubt it. Next week is also a set of 3 TBond auctions which tends to add gasoline to the fire. Assuming gold gets hit, it's unlikely the miners will gain any traction even if the SM continues towards 12,000. Some slight gaps today in GLD, PPLT, PALL, JJC, UUP, SPY, etc. which means there are some areas to return to shortly. The PM sector today moved up on decreased volume which is not particularly bullish. A number of miners sprinted out of the gate today only to pull back a substantial amount. GDX still has a huge gap sitting 20% higher but a number of things are in the way at the moment. One plus for the miners is that Bullish % (GDM) has turned around (23%) and above the 5 dma. During nearly all miner recoveries this has been a good indicator. It would be quite odd to see the miners get smashed again so seen and drive the BPGDM back to 15 or less....but that's what happened in Sept-Nov 2008. In fact even after the miners bottomed in late Oct 2008 the BPGDM bottomed hard yet again in November. I don't see how gold can take off quite yet until it navigates the rough waters of OE week. It would be one thing if gold had already demonstrated some strength along the way as it did during Aug 2010 OE. But that's not the case here at all. By late Wed to Thursday things could be free and clear if that's the plan. Gold accomplished a 5 wave - 50% retrace today from the drop of $1694 to $1604.
The Dow pattern is still evolving very similar to April/May 2008....but certainly could end the similarity at any time. The 2008 rebound lasted 2 months, eventually peaking slightly above the 200 dma. What's interesting is that the 200 dma coincides well with a retest of the broken summer h&s neckline (target 1275 S&P or Dow 12,220). Whether Dow gets to the 200 dma or not doesn't really matter as it's already moved back quite substantially. A pull back to the 50dma should occur soon enough.
The extreme short to long commercial ratios continue to persist after 4-5 weeks. Gold ratio still at 1.87, silver at 1.47, and the dollar at 5.96. As I mentioned a few weeks ago these extremes existed for up to 9 weeks during the volatility of Sept-November 2008. Just because COT levels are at extremes, doesn't mean they have to turn around right away.
Interesting short and long term GLD charts worth a look. His bear flag and double top price objectives if followed through point to $1400 / $1520. His public charts/articles on SLV, AEM, EDO, HUI are also worth a read. Would tend to agree with him that the hit to AEM last week might have been a critical blow to the entire gold mining sector, even though it was due to a single fault (loss of the $260 MILL Goldex mine) and not anything systemic to all miners.
Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009.
QE3 is a sure thing as government debt continues to dig a deeper grave.
Are they really this stupid, or are they destroying the dollar on purpose?
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009. >>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Dollar looks to be completing a short 5 wave set and probably due for a bounce on the daily. But the weekly chart shows a lot more room on the downside available if that's where it wants to go. The dollar performed a similar 3 week half-way point drop during Sept 2008 (from 80.5 to 75.9) before turning around and heading back to 88 by late October. It experienced a crash back in Dec 2008 back to 77 before yet again hitting 89 by March 2009. Today's dollar is also about 3 weeks into this drop and ironically is at that same key support level as in 2008....75.9-76.1. If things follow the 2008 pattern it should rebound from this range, especially since it hit a 3 yr bottom in May. The large volume on UUP's Friday gap-down almost seems like capitulation rather than a trend just beginning. We shall see. Many gaps sitting lower...and higher.
In looking at M2 QE is still in effect since QE2 officially ended on June 31st. M2 increased by about $200 BILL the first half of the year. Since the start of July M2 is up around $525 BILL...on course for 2011 to triple up on the 2010 increase of $283 BILL. They might even get a TRILL increase if they keep on pumping. The biggest M2 increases were seen in July-August when about $430 BILL was injected...coinciding with stock market weakness (ie the FED will be there to pump either openly or covertly to prop the SM). M2 is up around $800 BILL so far in 2011 and could hit >10% annually. Who said QE2 was over? The FED is ready and willing to pump up to $150 BILL per week as long as it's needed. And that's only the published liquidity we know about.....
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009. >>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009. >>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
In October dollar has only given back half of its September gains. September gains were a result of EU crisis; October losses were a result of what looked like a workable solution. Solution rapidly dissappearing, dollar will continue march upward. European banks are quite shaky.
Are they really this stupid, or are they destroying the dollar on purpose?
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009. >>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
In October dollar has only given back half of its September gains. September gains were a result of EU crisis; October losses were a result of what looked like a workable solution. Solution rapidly dissappearing, dollar will continue march upward. European banks are quite shaky. >>
Actually it's just about given back all of it's gains since Sept 6 not to be picky. The Euro has strengthened during the past six weeks. Let's see what the future will bring. I have mixed feelings. I could see the Euro at 1.45 or 1.34 easily. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I agree with the USD and S & P both being at support/resistance and something is gonna gave to give. That's been my point
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I agree with the USD and S & P both being at support/resistance and something is gonna gave to give. That's been my point
MJ >>
Well then why didnt you just say that in the first place? The dollar has simply retraced 62% of the move from Aug 29. Typical and normal, so far.
As PC might say, im seeing lots of energy in the currency, equity and PM charts. The INDU is right up against the 150 and 200dma and price resistance (june lows). The Euro is just below the 200dma and broken support (now resistance) marked by the summer lows.
Historically this week has the worse annualized returns of any week. Today certainly bucked the trend, can it continue? I bot DIA puts today and am still short the Euro. I'll go down with the ship if I have to.
I like the comparison graph of gold/dollar. Basically he has drawn the same trendlines for the dollar as I have in my dollar thread. The exception being that he has the dollar bumping up against and turning down from the broken wedge. At first I had a hard time matching my chart to his, but I think what he did is use the closing weekly prices as his points while ignoring the intra-week peaks. This is ok to do and does give a potentially MUCH different picture. If the weekly chart as he has drawn proves accurate, then the dollar is going to a lower low. Kind of hard to predict how low, but im pretty sure it wont be the bottom of the channel as he has drawn.
Multiple things are at a critical point and we should get answers soon, although yesterdays's trength in the SP500 seemed like a clue to me although it is weak this morning.
Gold's sudden strength could be anohter clue, but I still need to see it get over 1684ish.
<< <i>Wow, PMs on a tear and past my resistance level of 1685... I think this is the beginning of a nice $100+ move for gold.
USD unaffected. >>
PM paper traders should expect a margin requirement hike, monitor price action closely if you hope to join in with the chosen few that recieve "advance" notice.
Are they really this stupid, or are they destroying the dollar on purpose?
I'm not sure there's another one coming unless they really really really want to clamp down on PM prices. The margins have already been increased a LOT. It's only about 12.5:1 leverage compared to being around 20 or higher IIRC. I don't think I see margins going below 10:1 leverage unless the gov decides they want to attack speculators.
Jim Sinclair's Tanzanian Royalty Exploration has signed a deal to develop the Buckreef gold mine at a cost of $280 million in conjunction with Tanzania's state owned mining company, STAMICO. Author: Fumbuka Ng'wanakilala Posted: Tuesday , 25 Oct 2011
DAR ES SALAAM (Reuters) -
Tanzanian Royalty Exploration (TNX.TO), a Toronto-listed metals explorer, on Tuesday signed a joint venture agreement with the Tanzanian government to develop a $280 million gold mine in the east African country.
The deal involves the Buckreef Gold Mine Re-Development Project in Africa's fourth-largest gold producer, where Tanzanian Royalty, through its Tanzanian unit, TANZAM 2000, owns a 55 percent stake in the mine.
The state-run State Mining Corporation of Tanzania (STAMICO) owns the remainder of the project located some 115 kilometres southwest of the gold-rich Mwanza region near Lake Victoria.
If I recall correctly the Buckreef mine was not in the original TRX package and Sinclair's stake in it was a recent acquistion. So without it, Sinclair really had no real mine potential in the near future. But by developing Buckreef and being Tanzania's "go to mining guru" may give him additional revenue to further develop the original TRX properties. Those were the ones that Cohodk said he wouldn't give a nickel for....and maybe he was right. Actually I think the original comment was that all TRX owned was a single drill rig and a bunch of untested properties. But I do see in that article that Sinclair is trying to sell Tanzania's state mining company a 15% stake in his Kigosi project.
Miners had previously been exempted from repatriation of any revenues, but no longer. Yamana for instance has 13-20% of their total production/revenues coming out of Argentina. Xstrata, Goldcorp, Barrick, PAAS, PBR, Vale, and others have a stake in this. Extorre Gold is down a huge 24% today apparently on this news.....but yet to even start building a mine. As I understand it, this requires them to transfer their revenues to buy pesos. But if they then turnaround and sell the pesos, what was the gain? Previously, selected industries had to repatriate 30% of revenue. Now at 100% for all industries, all will be on equal footing.
Looks like I ended up being about a week early in my call for an $80+ move in gold and it looks like we have our answer as to which way everything's breaking... USD down, stocks & PM's up... We should be in for continued upside movement through next week, either Nov 1 or Nov 10.
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>TRX will probably never mine an ounce of gold. But he doesnt care as thats not his intent, which is to become one of the 1%. And good for him. All is well now that Europe is saved. Whoohoo. And another fairy tale has its roots in Europe. LOL >>
TRX isn't the first royalty model than doesn't plan on building and operating a mine. Franco-Nevada, Silver Wheaton, XPL, and others carry the same royalty model. Sinclair is already comfortably within the 1%....probably working on top 0.1% or 0.01%.
Today's S&P moved gapped up to restest the March-August head and shoulders neckline along with the 200 dma. So now what? That's the same glide path that the June 2007 - May 2008 market followed, before falling apart and heading back down to a new low. But then again we didn't have QE "X" available back then.
<< <i>Today's S&P moved gapped up to restest the March-August head and shoulders neckline along with the 200 dma. So now what? That's the same glide path that the June 2007 - May 2008 market followed, before falling apart and heading back down to a new low. But then again we didn't have QE "X" available back then. >>
Now (as I believe I previously suggested) we will see stocks soar for the rest of the year. If you look at Wall Street earnings, they are actually quite decent. There is no shortage of capital. Businesses have adjusted to the current overall level of sales and sales levels in most industries are stable. The declining dollar will help exports and business, and capital will start moving from bonds looking for higher yields. This article makes a really compelling argument for loading up on gold and silver stocks RIGHT NOW.
Gold looking real good right now. Wait for a pullback possibly to the 1700 area and load up...
Nice month for stocks in general. Look at the last 4 weeks for SP500... a move from roughly 1085 to 1285 in 4 weeks! It compares only to the ~250 point drop over 4 weeks that started 10 weeks prior to this rally.
ECRI Recession Watch: Growth Index Virtually Unchanged
By Doug Short October 28, 2011
The Weekly Leading Index (WLI) growth indicator of the Economic Cycle Research Institute (ECRI) posted -10.0 in its latest reading, data through October 21, a fractionally change from the previous week's -10.1.
On September 30th, the ECRI publicly announced that the U.S. is tipping into a recession, a call the Institute had announced to its private clients on September 21st.
Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there's nothing that policy makers can do to head it off.
ECRI's recession call isn't based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down — before the Arab Spring and Japanese earthquake — to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not "soft landings." Read the report here. For a close look at this movement of this index in recent months, here's a snapshot of the data since 2000.
NumbersUsa, FairUs, Alipac, CapsWeb, and TeamAmericaPac
I know that the yen is strong against the dollar. I did not know that it's at an all time post war high. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Comments
Rather listless day for PM's. Some would say they were strong relative to equities, but I still cant get excited about the possibilties of a breakout to the upside. Just not seeing it. I suppose I could make an arguement for a chance at an $80 rally , but an $80 drop is just as likely, so why bother? Still long ZSL. Short YEN, EURO, $AUD. Have puts on 2 equities--GMCR, (looking great today), and a restraurant--avocados are expensive.
Knowledge is the enemy of fear
<< <i>Speaking of fractal energy, how have the calls been from Nichols over this past year? As I recall he was on the wrong side of the market just before a previous dump. >>
His method is pretty good at predicting the timing and duration of big moves but the direction is always the tough part, which is why I use lots of different indicators including my own fractal indicators. Yesterday was kind of a warning for what is developing this morning. Interesting that SP500 is stable while PMs have declined this morning.
Closed $AUD short (20% profit). I think it goes A LOT lower, but im a trader, not an equine dentist.
Avocado restraurant getting turned into guacamole this morn.
Knowledge is the enemy of fear
I was disappointed I didn't get to really talk to any native Frenchies while I was there, although I didn't expect to hear anything I didn't already know. Although the foreign media did seem to discuss the whole Greek and Euro situation a little more honestly than they do here.
<< <i>I'm headed to Australia in 2 weeks so I hope the AUD/USD continues to fall. It will be interesting to see how it has changed over the past 5 years.
I was disappointed I didn't get to really talk to any native Frenchies while I was there, although I didn't expect to hear anything I didn't already know. Although the foreign media did seem to discuss the whole Greek and Euro situation a little more honestly than they do here. >>
Interesting comment. I seem to feel that we "get it", much more than the French do. We know they are FUBAR, yet they bury their heads. Or do you mean that the Media here is mostly glossing over the European problems?
Im sure you will be amazed at what has changed in Aussieland over the last 5 years. I would be interested of your opinion of whether you thought the growth was sustainable.
I have a friend in the banking business in Switzerland who is buying a house there for $1 million Euro. He is using, and is allowed to, use his retirement plan as a downpayment. I told his this is a classic sign of a top. He was bewildered, which amazed me as he should know better. But my thought is if prices are so high that people must use all their savings to purchase a home, then prices cannot go higher, as those prospective future buyers will need to use all their savings PLUS more, to buy a house. Incredibly unsustainable. And im afraid the real estate market in Australia is at a similar point. I'd really like to know your opinion of this since it your area of expertise and you have experience with the USA RE bubble.
Knowledge is the enemy of fear
On another note...
The breakout move that I've been anticipating still hasn't come, but still can come just about anytime - there is plenty of energy in the patterns of both SP500 and gold so the next short-term move will likely be large and should come any day now.
McLellan looks at a number of factors and his latest report is anticipating a nice bull market for stocks for the remainder of the year into January. He believes that the October low is already in. So as gold has been fairly direclty correlated to stocks, I have to suggest that gold will do well also. He also had some comments about the USD and made a good case that the bull run in the dollar that we saw recently is temporary and will be short-lived, which also bodes well for PMs.
He did note some possible danger for gold due to the fact that real interest rates are below -3% and that gold hasn't done well in the past when this was the case because "the more ridiculous that a negative real interest rate situation gets, the more likely somebody is going to decide to do something about it. We are way past the time for the Federal Reserve to start raising short term rates to combat the almost 4% inflation that the US is experiencing..." which I think most of us agree with.
He also noted some negative signs for XAU (gold stocks), "the XAU has broken its long uptrend line and now rebounded back up in an effort to test the resistance that it might now offer. That is not a good sign for gold stocks, especially when we see that the lows earlier in 2011 also stand ready to act as resistance." He does note that the XAU is oversold at the moment (according to his indicators) and this is positive.
Some of the tops and bottoms that are being predicted are coinciding roughly with the date next week when we get more details about the European bailout... next week will be volatile.
Agreed 100%. There is a very sizable move coming in PMs and equities and currencies.
He also noted some negative signs for XAU (gold stocks), "the XAU has broken its long uptrend line and now rebounded back up in an effort to test the resistance that it might now offer. That is not a good sign for gold stocks
We were on this over a month ago. Traders should have sold in mid-Sept. as warned.
He does note that the XAU is oversold at the moment (according to his indicators) and this is positive.
My momos dont show anything even remotely considered oversold and are only halfway thru the cycle. In fact, the 3rd leg down may have started this week. Looks like another 15% downside.
Regarding todays activity, GLD appears to be breaking the uptrend from January. The 200dma ($150) is the likely target, however an overshoot is possible considering it has not traded below the 200dma in almost 3 years. $140 would be the target as this is a 38% retrace of the move off the 08 lows. A 50% retrace would target 127 which is also the Jan lows and I think pretty good support. Personally, im not a stacker until gold gets closer to this level.
The dollar is on the launching pad.
Knowledge is the enemy of fear
<< <i>The dollar is on the launching pad. >>
Maybe for a short term move, but not for a multi-year uptrend.
McLellan provided a chart of the COT traders report for dollar index futures vs. the dollar index, and whenever the short position as a % of open interest gets over 20%, which is it now (currently about 28%), it always leads to a fall in the USD index, although it can stay this way for a few more weeks or longer. And I'm not suggesting new lows, just perhaps to the lower 70's again. You're also fighting a fed that wants to weaken the dollar, not strengthen it. Good luck.
I also believe the FED is POWERLESS in controlling the dollar. Evidence in the last 3 years. Or in Japan's ability to manage the YEN. The global economy and markets are MUCH larger than the FED and all other CBs combined and control the broad scale of currencies, while CBs just react to these movements. Im not sure there are enough trees in the world to make paper to satisy dollar demand. Of course im overemphasizing, but I feel strongly about this.
GLD at critical support--low closing prices and 150dma.
Im afraid Athens could burn this weekend.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>I also believe the FED is POWERLESS in controlling the dollar. Evidence in the last 3 years. Or in Japan's ability to manage the YEN. The global economy and markets are MUCH larger than the FED and all other CBs combined and control the broad scale of currencies, while CBs just react to these movements. Im not sure there are enough trees in the world to make paper to satisy dollar demand. Of course im overemphasizing, but I feel strongly about this. >>
The fed is not powerless but they are down to just one bullet - the printing press.
The problem with your arguments is that the US offers negative real interest rates, and until they raise rates the dollar will remain unattractive. OF course, as you mention many other currencies aren't looking so hot either, but that's about the only thing the USD has going for it.
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I agree gold at critical support. If it can't hold $1600, look for $1400's...
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
SP500 did well also, looks like a breakout. If the breakout holds (not a false breakout), then we really should be in the clear for a rally for the rest of the year.
Now since I believe the SP500 and gold are still fairly-directly correlated, I think this bodes well for PMs as well. If gold heads higher earlier next week in conjunction with SP500, I say go long and go big...
The Dow pattern is still evolving very similar to April/May 2008....but certainly could end the similarity at any time. The 2008 rebound lasted 2 months, eventually peaking slightly above the 200 dma. What's interesting is that the 200 dma coincides well with a retest of the broken summer h&s neckline (target 1275 S&P or Dow 12,220). Whether Dow gets to the 200 dma or not doesn't really matter as it's already moved back quite substantially. A pull back to the 50dma should occur soon enough.
The extreme short to long commercial ratios continue to persist after 4-5 weeks. Gold ratio still at 1.87, silver at 1.47, and the dollar at 5.96. As I mentioned a few weeks ago these extremes existed for up to 9 weeks during the volatility of Sept-November 2008. Just because COT levels are at extremes, doesn't mean they have to turn around right away.
roadrunner
Interesting short and long term GLD charts worth a look. His bear flag and double top price objectives if followed through point to $1400 / $1520.
His public charts/articles on SLV, AEM, EDO, HUI are also worth a read. Would tend to agree with him that the hit to AEM last week might have been
a critical blow to the entire gold mining sector, even though it was due to a single fault (loss of the $260 MILL Goldex mine) and not anything systemic to all miners.
Link to more public charts
roadrunner
QE3 is a sure thing as government debt continues to dig a deeper grave.
Are they really this stupid, or are they destroying the dollar on purpose?
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009.
>>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
chart
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Dollar looks to be completing a short 5 wave set and probably due for a bounce on the daily. But the weekly chart shows a
lot more room on the downside available if that's where it wants to go. The dollar performed a similar 3 week half-way point drop
during Sept 2008 (from 80.5 to 75.9) before turning around and heading back to 88 by late October. It experienced a crash back in Dec 2008
back to 77 before yet again hitting 89 by March 2009. Today's dollar is also about 3 weeks into this drop and ironically is at that same key support
level as in 2008....75.9-76.1. If things follow the 2008 pattern it should rebound from this range, especially since it hit a 3 yr bottom in May.
The large volume on UUP's Friday gap-down almost seems like capitulation rather than a trend just beginning. We shall see. Many gaps sitting lower...and higher.
In looking at M2 QE is still in effect since QE2 officially ended on June 31st. M2 increased by about $200 BILL the first half of the year. Since the start of July
M2 is up around $525 BILL...on course for 2011 to triple up on the 2010 increase of $283 BILL. They might even get a TRILL increase if they keep on pumping.
The biggest M2 increases were seen in July-August when about $430 BILL was injected...coinciding with stock market weakness (ie the FED will be there
to pump either openly or covertly to prop the SM). M2 is up around $800 BILL so far in 2011 and could hit >10% annually. Who said QE2 was over? The FED is
ready and willing to pump up to $150 BILL per week as long as it's needed. And that's only the published liquidity we know about.....
FED money tables M1 & M2
roadrunner
Text
<< <i>
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009.
>>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
chart >>
If it bounces, then it will be much more than a bounce.
Knowledge is the enemy of fear
<< <i>If This loaded properly, its an interesting charting video: Silver & Kick the Can
Text >>
Interesting is that there is no such increase in volume in SLV. Maybe we'll soon see which tail is wagging which dog.
Knowledge is the enemy of fear
<< <i>
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009.
>>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
chart >>
In October dollar has only given back half of its September gains. September gains were a result of EU crisis; October losses were a result of what looked like a workable solution. Solution rapidly dissappearing, dollar will continue march upward. European banks are quite shaky.
Are they really this stupid, or are they destroying the dollar on purpose?
<< <i>
<< <i>
<< <i>Look for the US$ to continue strengthening as european meltdown intensifies and losing bond holders become forced to reflect their losses. Banking crisis (worldwide) is next on the agenda with little to no bailout. Expect PMs to continue suffering in the short term as they did in 2009.
>>
Continue? The dollar has actually gotten weaker the past several weeks during the European meltdown. I find that interesting. The dollar chart wise is at a bounce or break point. MJ
chart >>
In October dollar has only given back half of its September gains. September gains were a result of EU crisis; October losses were a result of what looked like a workable solution. Solution rapidly dissappearing, dollar will continue march upward. European banks are quite shaky. >>
Actually it's just about given back all of it's gains since Sept 6 not to be picky. The Euro has strengthened during the past six weeks. Let's see what the future will bring. I have mixed feelings. I could see the Euro at 1.45 or 1.34 easily. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
roadrunner
<< <i>Rambus chart views on the dollar - interesting
roadrunner >>
I agree with the USD and S & P both being at support/resistance and something is gonna gave to give. That's been my point
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>
<< <i>Rambus chart views on the dollar - interesting
roadrunner >>
I agree with the USD and S & P both being at support/resistance and something is gonna gave to give. That's been my point
MJ >>
Well then why didnt you just say that in the first place?
As PC might say, im seeing lots of energy in the currency, equity and PM charts. The INDU is right up against the 150 and 200dma and price resistance (june lows). The Euro is just below the 200dma and broken support (now resistance) marked by the summer lows.
Historically this week has the worse annualized returns of any week. Today certainly bucked the trend, can it continue? I bot DIA puts today and am still short the Euro. I'll go down with the ship if I have to.
Knowledge is the enemy of fear
<< <i>Rambus chart views on the dollar - interesting
roadrunner >>
I like the comparison graph of gold/dollar. Basically he has drawn the same trendlines for the dollar as I have in my dollar thread. The exception being that he has the dollar bumping up against and turning down from the broken wedge. At first I had a hard time matching my chart to his, but I think what he did is use the closing weekly prices as his points while ignoring the intra-week peaks. This is ok to do and does give a potentially MUCH different picture. If the weekly chart as he has drawn proves accurate, then the dollar is going to a lower low. Kind of hard to predict how low, but im pretty sure it wont be the bottom of the channel as he has drawn.
Knowledge is the enemy of fear
Gold's sudden strength could be anohter clue, but I still need to see it get over 1684ish.
Too many rumors and conflicting econ data to play this market safely. Im mostly in cash.
Knowledge is the enemy of fear
USD unaffected.
<< <i>Wow, PMs on a tear and past my resistance level of 1685... I think this is the beginning of a nice $100+ move for gold.
USD unaffected. >>
PM paper traders should expect a margin requirement hike, monitor price action closely if you hope to join in with the chosen few that recieve "advance" notice.
Are they really this stupid, or are they destroying the dollar on purpose?
<< <i>unless the gov decides they want to attack speculators. >>
Are they really this stupid, or are they destroying the dollar on purpose?
The move smells of a panic into PMs ahead of the unknown European "solution".
Knowledge is the enemy of fear
<< <i>Will silver finally break thru resistance? Gold is at resistance also.
The move smells of a panic into PMs ahead of the unknown European "solution". >>
I fear we will see speculators recoup earlier losses. I hope I'm wrong and it continues.
Are they really this stupid, or are they destroying the dollar on purpose?
Jim Sinclair to get his African gold mine at last
Jim Sinclair's Tanzanian Royalty Exploration has signed a deal to develop the Buckreef gold mine at a cost of $280 million in conjunction with Tanzania's state owned mining company, STAMICO.
Author: Fumbuka Ng'wanakilala
Posted: Tuesday , 25 Oct 2011
DAR ES SALAAM (Reuters) -
Tanzanian Royalty Exploration (TNX.TO), a Toronto-listed metals explorer, on Tuesday signed a joint venture agreement with the Tanzanian government to develop a $280 million gold mine in the east African country.
The deal involves the Buckreef Gold Mine Re-Development Project in Africa's fourth-largest gold producer, where Tanzanian Royalty, through its Tanzanian unit, TANZAM 2000, owns a 55 percent stake in the mine.
The state-run State Mining Corporation of Tanzania (STAMICO) owns the remainder of the project located some 115 kilometres southwest of the gold-rich Mwanza region near Lake Victoria.
....
_Reset
no real mine potential in the near future. But by developing Buckreef and being Tanzania's "go to mining guru" may give him additional revenue to further develop
the original TRX properties. Those were the ones that Cohodk said he wouldn't give a nickel for....and maybe he was right. Actually I think the original comment
was that all TRX owned was a single drill rig and a bunch of untested properties. But I do see in that article that Sinclair is trying to sell Tanzania's state mining company
a 15% stake in his Kigosi project.
roadrunner
Miners had previously been exempted from repatriation of any revenues, but no longer. Yamana for instance has 13-20% of their total production/revenues coming out of Argentina.
Xstrata, Goldcorp, Barrick, PAAS, PBR, Vale, and others have a stake in this. Extorre Gold is down a huge 24% today apparently on this news.....but yet to even start building a mine.
As I understand it, this requires them to transfer their revenues to buy pesos. But if they then turnaround and sell the pesos, what was the gain? Previously, selected industries had
to repatriate 30% of revenue. Now at 100% for all industries, all will be on equal footing.
Another article better explaining the ramifications
roadrunner
All is well now that Europe is saved. Whoohoo. And another fairy tale has its roots in Europe. LOL
Knowledge is the enemy of fear
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>TRX will probably never mine an ounce of gold. But he doesnt care as thats not his intent, which is to become one of the 1%. And good for him.
All is well now that Europe is saved. Whoohoo. And another fairy tale has its roots in Europe. LOL >>
TRX isn't the first royalty model than doesn't plan on building and operating a mine. Franco-Nevada, Silver Wheaton, XPL, and others carry the same royalty model.
Sinclair is already comfortably within the 1%....probably working on top 0.1% or 0.01%.
Today's S&P moved gapped up to restest the March-August head and shoulders neckline along with the 200 dma. So now what?
That's the same glide path that the June 2007 - May 2008 market followed, before falling apart and heading back down to a new low. But then again we
didn't have QE "X" available back then.
roadrunner
<< <i>Today's S&P moved gapped up to restest the March-August head and shoulders neckline along with the 200 dma. So now what?
That's the same glide path that the June 2007 - May 2008 market followed, before falling apart and heading back down to a new low. But then again we
didn't have QE "X" available back then. >>
Now (as I believe I previously suggested) we will see stocks soar for the rest of the year. If you look at Wall Street earnings, they are actually quite decent. There is no shortage of capital. Businesses have adjusted to the current overall level of sales and sales levels in most industries are stable. The declining dollar will help exports and business, and capital will start moving from bonds looking for higher yields. This article makes a really compelling argument for loading up on gold and silver stocks RIGHT NOW.
Gold looking real good right now. Wait for a pullback possibly to the 1700 area and load up...
<< <i>Nice day for gold and silver stocks. >>
Nice month for stocks in general. Look at the last 4 weeks for SP500... a move from roughly 1085 to 1285 in 4 weeks! It compares only to the ~250 point drop over 4 weeks that started 10 weeks prior to this rally.
By Doug Short
October 28, 2011
The Weekly Leading Index (WLI) growth indicator of the Economic Cycle Research Institute (ECRI) posted -10.0 in its latest reading, data through October 21, a fractionally change from the previous week's -10.1.
On September 30th, the ECRI publicly announced that the U.S. is tipping into a recession, a call the Institute had announced to its private clients on September 21st.
Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there's nothing that policy makers can do to head it off.
ECRI's recession call isn't based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down — before the Arab Spring and Japanese earthquake — to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not "soft landings." Read the report here.
For a close look at this movement of this index in recent months, here's a snapshot of the data since 2000.
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Japan has some serious issues in their economy such as limited natural resources and a very fast aging population.
They also have high debt and their general growth prospects are mediocre at best?
why is the YEN so high?
Groucho Marx