Peter Schiff on the recent gold pullback.
Mesquite
Posts: 4,075 ✭✭✭
There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.
–John Adams, 1826
–John Adams, 1826
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I knew it would happen.
Knowledge is the enemy of fear
<< <i>Personally, I view sentiment as a leading indicator. Fundamentals usually follow. >>
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<< <i>Personally, I view sentiment as a leading indicator. Fundamentals usually follow. >>
And thats why most investors are usually behind the curve. Markets are largely driven by sentiment and are discounting mechanisms. They move before changes in fundamentals are apparent. This is why the stock market begins to turn lower while news is still good and begins to turn higher while news is still bad.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>Personally, I view sentiment as a leading indicator. Fundamentals usually follow. >>
And thats why most investors are usually behind the curve. Markets are largely driven by sentiment and are discounting mechanisms. They move before changes in fundamentals are apparent. This is why the stock market begins to turn lower while news is still good and begins to turn higher while news is still bad. >>
Your explanation is circular. What you're saying is that sentiment moves markets because sentiment reflects fundamentals which are not yet well-known or being reported in the media/press. OK... so what? That does nothing to prove that fundamentals "follow" sentiment. Your argument actually establishes the opposite, namely that sentiment is following fundamentals.
Oh, and "momentum" and "don't fight the Fed."
<< <i>....and then there's "trending."
Oh, and "momentum" and "don't fight the Fed."
out flows...in flows....open interest....trigger selling.......AAAARRRRRGGGHHHHHH!
m..u..st...........k..ee...p........sta..ck...in..g....
Loves me some shiny!
Today Gartman Sold the rest of his own gold stake and stated today that he'd sell his managed gold ASAP as the gold bull is resting resting, down 12% from the top. He said the longterm bull market in gold was still intact, but if it loses another 10-12% from here ($1660) then it's not.
$1500 by eoy?
Liberty: Parent of Science & Industry
Back in August I wrote that the gold relative strength index (RSI) was at a level that matched the previous 2 tops, and each time gold suffered a 20-30% decline and didnt hit new highs for 18-20 months. Its got a ways to go.
But this time might just be different.
Knowledge is the enemy of fear
Fred, Las Vegas, NV
<< <i>
<< <i>
<< <i>
<< <i>Personally, I view sentiment as a leading indicator. Fundamentals usually follow. >>
And thats why most investors are usually behind the curve. Markets are largely driven by sentiment and are discounting mechanisms. They move before changes in fundamentals are apparent. This is why the stock market begins to turn lower while news is still good and begins to turn higher while news is still bad. >>
Your explanation is circular. What you're saying is that sentiment moves markets because sentiment reflects fundamentals which are not yet well-known or being reported in the media/press. OK... so what? That does nothing to prove that fundamentals "follow" sentiment. Your argument actually establishes the opposite, namely that sentiment is following fundamentals.
Not to speak for cohodk but I believe he's saying that sentiment is often ephemeral whereas fundamentals are built over time and are the underlying force that drives markets in the long term. For example, individual stocks and the stock market as a whole can move in wild gyrations on a daily basis (sentiment) yet it is the fundamentals (earnings) that leads to long term price gains and losses. Listen to him. He's one of the very few on here that has a clue.
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–John Adams, 1826
It's already down 300+ from it's highs, and perhaps has another 100+ to go. What a beauty of a time to get started.
–John Adams, 1826
This one has already hit the 20% mark at the Sept 26th overnight low and now within 0.6% of that again. And it's even tougher if this approaches the 40% mark.
If we're going purely by sentiment then gold "should" have turned already. Hulbert Gold Sentiment Index was something like 3% near the start of this week and now must be negative.
Sentiment doesn't get much more bearish than that. Many past rallies were started in the 10-30 range. But, I'm sure sentiment was off the map in 2008 before gold rallied in late
October. BPGDM is another sentiment reflector and it hit <14% today, only the 3rd time in the last 3 yrs. It also hit this mark during October's crush. But I do recall that BPGDM fell
to <1% in 2008 and might have actually been 0 (ie no miners above the 50 dma). Daily gold RSI (14) today hit 27. The only time it was lower was a 1-2 week period in August 2008
when it bottomed at 21-22. In August 2008 gold's daily RSI bottoming and the 200 dma being blown through occurred at roughly the same time. It took 11 weeks or so from that point
for a final bottom. But inbetween gold put in bounces of 10% and then 25%.
roadrunner
"I firmly believe there is no political will, on the planet anywhere, but especially in the Western world, to invite a severe deflation.
As the deflationary forces continue to surface you will see the absolute opposite. I firmly believe you are more apt to have QE to infinity than you are to welcome rising unemployment and declining business activity."
I happen to agree with him, especially coming up on this next election. Ain't no way that they're going to let the economy flounder now by tightening up on credit or spending.
I don't know the method that they are going to use, but I have a lingering fear that big money will appear out of nowhere and be poured into targeted markets, industries and localities for the next 12 months with no accountability, as usual.
The Debt could become $20 trillion while nobody is even watching.
I knew it would happen.
<< <i>Here is one take on Gartman's move. >>
Gartman is a fool. Dont follow him.
<< <i>Whats' your Gold (the metal) nibble level, Roadrunner? >>
Since gold miners are far more beaten down than the metal itself I'm nibbling on those. Whether someone wishes to add bullion at this point it really depends on their
personal situation (how much they have already, total % goal, how much money to spend over what period, risk tolerance, gold for speculation or protection? etc.).
Someone who had no exposure to gold and was looking to get in probably should be buying a tranche right now. Another person who sold gold in the $1750-$1800 range
on this last bounce might be looking to add 1/3 to 1/2 of that back right now. And then a trader who is confident gold will target $1526 or $1488 next would wait for those
positions.
There's never any guarantee of getting a lower or higher gold price. Those looking to buy under $1,000 after gold pulled back from $1226 two yrs ago are still waiting ($1044 bottom).
Same comment for those who watched it go past $500 and were waiting for $400 or lower. Now we have a lot of people who were left behind at the pull back from $1577
expecting something in the $1200's or $1300's to come. It never did as gold bottomed in June at $1462 and then took off. Will they once again wait for the $1000-$1300's or
take a stab at $1475-$1575? Last I looked, every gold share or futures contract sold yesterday went to an eager buyer. There are buyers at every price level....though a lot
of them may be HFTC's playing solitaire with themselves.
roadrunner
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<< <i>Here is one take on Gartman's move. >>
Gartman is a fool. Dont follow him. >>
I agree with that. I don't watch CNBC as much as I used to, but I remember when gold was rising Gartman was always negative, saying it wouldn't last. Gartman is the last person I would take financial advice from.
Same thing happen to me as a broker in 1999-2000. Everyone wanted to buy internet stocks. I said stay away. A week later those stocks were 10% higher. My clients called me an idiot and bought. The stocks went up another 20%. Six months later the stocks were down 50% and my clients wanted to cry on my shoulder. I called them idiots and left the retail side of the business.
EVERYONE is a genius in a bull market.
BTW---When my clients wanted to buy interent stocks I told them to buy the Franklin natural resources fund instead. They all laughed. I had million dollar accounts make a token purchase of $5000 just to get me off the phone. My, my, my how the table often turns.
Knowledge is the enemy of fear