Gold and Silver, amongst other assets, crashed during Asian trade, which is morning for us here in Australia. At one point in time, Gold almost touched it's 200 day moving average at $1,520. Silver touched $26 during Australian midday.
Who would have thought that Gold would beat the S&P 500 into a bear market, when a month ago it was making new records as stocks were tanking! Is anyone buying or selling anything on this Monday morning? What is your guys view on where markets are heading for the next few days or weeks? I'll be interested to here everyone's opinions. =]
http://www.creditwritedowns.com/2011/09/expectations-theory-of-interest-rates.html
ReplyDeleteThanks for link wsm. So, are you buying or selling anything wsm? Or do you just post deflation links?
ReplyDeletelong US mkt/banks
ReplyDeletewsm - I read this blog regularly and am unsure why you continously attack the views of Tiho and link any and every deflationary blog post you can get your hands on? Thanks to freedom, you are not chained to your computer chair with your eyelids taped open and forced to read this blog...
ReplyDeleteAlso, if you are not very flexible to a changing economic environment, locked into one way of thinking and believe inflations are stupid - than I have a palace in London, a statue in Rio and a bridge in Brooklyn I want to to sell you partner.
Are any super bears, that think the world will end soon, shorting Apple? If someone feels ultra bearish, they should short this thing from a contrarian point of view. It must be the most overcrowded tarde in the US equity space!
ReplyDeleteTechnically, I just saw a false breakout at the psychological level of $400 - a 2B pattern also known as a bull trap. There a technical divergences and some "catalyst news".
Also Hermes in the CAC 40 has gone up over 3 times since March 2009 lows into a parabolic and now trades at 50 times earnings! If China crashes, Hermes will go down a lot!!!
My downside target is 1487.1 on Dec. futures. Wouldn't be surprised if we get there in the overnight market tonight, or during tomorrow's session. But at that point, I'm a buyer.
ReplyDeletehello,
ReplyDeleteCongratulate you on the blog
I've seen his old post and do not know where I can get the "Domestic net equity flow" of ICI ...... that table appears.
thanks
Hagen
ICI.org
ReplyDeleteAlso I will be posting a sentiment update sometime this week, because we could be close to some type of a bottom - at least for a rally. Sentiment is very bearish in general!
If we follow the seasonal pattern then the market should bottom out sometime around Oct 15-20 and then bounce into the end of the year.
ReplyDeleteAnother warning sign is the significant weakness in Copper. As I write this the market is up 100 Dow points, but copper is making new lows. Not good for the bulls.
However, I cannot get really short stocks at this point, knowing that Fed, BOE, and ECB intervention is coming soon.
Furthermore, I do not buy into the whole deflationary we are all going to die slogan of the bears. Printing money and currency devaluation are the easiest and most non-democratic solutions to the US and Europe's debt problems. Why should this time be any different?
So in nominal terms the stock market will hold up relatively well, while falling in real terms.
NHC
Tiho:
ReplyDeletePerfect place to catch the shorts in the US market, especially if the sentiment is as negative as it seems.
Like your ideas about agriculture in general, how are you managing the shorts in gold and silver? I covered my short in SLV after the steep price decline and heavy volume-perhaps too early and time will tell.
Warren - Hard for me to see Gold drop to 1490 that quickly, but I guess we almost did get there with 1530. However, such a fast move always has strong rebounds. I do not believe prices bottom in such a manner that quickly. You see Gold has been in a bull market for over 1,000 days, it has been up 10 years in the row already (11 including this one) and also 11 quarters in the row.
ReplyDeleteThat is very very rare. Usually corrections are not just about price or % movement, but also about time and consolidation. When great uptrends end and start to correct - they need time to rest!
During the last great Gold bull, priced corrected from December 1974 to middle of 1976 (18 months) and fell 40%! I read about how so many "smart investors" cal the end of the Gold bull at that point and boy were they wrong. Gold went onto to gain 8 times from 1976 to 1980... EIGHT TIMES! That is a lot of money.
So I am not saying Gold will fall 40% here - its already down 20% at one point - but nonetheless it takes time to consolidate after such technical damage is done. Eventually, it will be a great buying opportunity, and prove all the deflationists and super bears wrong. And who knows, if we do correct back to $1,250 or something, than we could go up 8 times after that. It all depends on general Bernanke...
NHC - I agree on the seasonality part. October bottom could be in the cards. Some say we are already there, and I agree from the sentiment and technical side of things.
But then I ask myself, has anything in Europe changed? No. It looks like they will not let the Greece go bust, instead they are increasing the bailout fund. Such a disappointment if that happens, because we are then setting ourselves up for an even worse crash next year or the year after. If they let Greece go bust now, it would really wash everything out and that is what I was hoping for and why I am 96% cash - anticipation of a huge bottom!
Anonymous - Similar to Warren's answer, I still remain short Gold and Silver, however I am extremely bullish on both of them. Actually Silver is my favourite asset class for the next 5 to 10 years - especially now after this crash! However I am not covering my shorts just yet, we only had 3 days of major selling. I believe we could retest that $26 support on Silver and we need to break the 200 day MA in Gold. it has been years since we traded below it. I am not covering until we break and people really panic - then I will buy!
Tiho,
ReplyDeleteWe got pretty close, but not close enough. In the meantime, I bought 3 month out Silver calls near the bottom. My expectations are for a bottom here in gold and silver, then a huge rally into January, which should be the end of the bull market. In Elliott wave speak, I believe we're finishing wave 4 of 5 and are going into wave 5 of 5. I project a 5 year bear market is coming soon.
Fair enough.
ReplyDeleteMy view is that Gold and Silver will be going up for years to come. Technical analysis including Elliot Wave have nothing to do with general conditions, in my opinion. For me, the conditions state we are still in a currency devaluation environment due to high debt. If nothing changes in conditions, nothing changes with the trend of precious metals either. Has anything changed since Gold and Silver fell? No. So its just a correction.
Silver is very depressed on historical level. In 1980, Silver hit $50 an ounce. In todays devalue currency, that is about $130. Why would Silver bull market stop right now, when it hasn't even made a new high either normal or in real terms? In my opinion Silver will go way above $100 in coming years or even sometime this decade.