A FEW GUESSES FOR 2015: and a brief comment on biases

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The following is a copy of Tuesday nights premium SMT report:

Rather than the usual market wrap I wanted to talk about biases today.

First off I realize that most of the subscribers here are gold bugs. As such all of you want me to tell you that gold is going to bottom, and then you want me to make gold go up. If I can’t do those things then you probably aren’t happy. Here’s the problem, I can lie to you and tell you that gold is going up, and that may make you feel good, but if it doesn’t go up you are going to lose money. And I suspect that if you lose money the joy you feel from me assuring you gold is going to go up will quickly fade. So all in all I think it’s better I don’t lie to you and give you false hope.

Yes I do think gold will eventually go up, way up, probably over $5000. What I don’t know is when that is going to start. If this bear market is like most, then the sector is probably going to have to suffer a bankruptcy phase. This is a period of time where prices just drop to absolutely absurd levels. Levels that no one can conceive of being even in the realm of possibility right now. That could very well occur as the stock market enters a bubble phase. That would be a terrible one two punch as gold bugs watch while everyone else gets rich and their chosen asset just goes lower and lower.

Let’s face it, until something fundamentally changes gold isn’t going to make a big U-turn and head for the moon like the touts would like you to believe. As it is the bullion banks are making a killing by pushing and pulling the metals where they want them to go. Something is going to have to change so that the market takes the pricing of gold out of the hands of the paper markets and back to basic supply and demand. And I just don’t think that’s likely to happen until the stock market tops

I also know that many of you are vehemently against investing in the stock market. It’s the anti gold trade so to speak. For many of you all you can see is an imminent crash around every corner.

But here is the thing. I think stocks are entering a bubble phase. And a bubble phase in any asset is that rare period of time where big money can be made very quickly. If we were entering a bubble phase in gold I suspect none of you would have any qualms at all about participating. So I’m going to suggest that traders check their biases for the time being and allow themselves to make some money off the stock market. There will be plenty of time later to make money off of gold once the fundamentals shift. Trust me it isn’t going to runaway from us and leave us at the station. We can have the luxury of letting an entire intermediate cycle pass us by and still enter at the bottom of the next ICL and be fine.

But if you miss the bubble phase in the stock market it will likely be years before the next one comes along. At the moment we are still very early in a new daily cycle. Our stops are reasonably close, yet many of you continue to get whipsawed to death by the banksters in the metals. You need to make the decision to get off that train. Let the banksters take some one else’s money for now. Instead of competing in a market that is clearly being manipulated against you (the banksters even appear to have capped an intermediate cycle before it could break the intermediate trend line), decide to trade the market that is being manipulated in your favor. 

26 thoughts on “A FEW GUESSES FOR 2015: and a brief comment on biases

  1. M.D.Cov

    Genuisly ochestrated material here thank you……. Perhpas one of the best gifts for me today.

    P.S. i think you work harder than Santa’s elves for sure.

    Merry Christmas to you and your subscribers and follower alike.

    1. gary Post author

      Oil is the main driver of the CRB. It is pretty oversold so a counter trend bounce soon wouldn’t be unexpected . But the final 3 year cycle low probably isn’t going to finish until spring or early summer.

  2. Nick Studt

    I think it’s nuts to fall in love with any one particular sector… Go where the money is… If it’s the SM, which it is and has been for a while, just hold your nose and get in… it’s all about making money….LOTS of it.

  3. Jay

    I think now isn’t the time to fall in love the equities, and now may prove good time to start falling back in love with Gold again. Stocks can’t go up forever, and Gold can’t go down forever either.

    1. gary Post author

      But can you hang on if gold still has another 3-8 months or longer before a final bottom? That could mean miners fall another 25-50%. Sure 3-4 years from now it won’t make a difference but in my experience when someone says something can’t go down much more it means they are in no way prepared to handle it if they do. In a bankruptcy phase some companies go to 0.

      Keep in mind gold still hasn’t even tested the last C-wave top (1050). All D-waves of this secular bull have fallen back to test the prior C-wave top except one. So a move down to 1050 would just be par for the course and nothing out of the ordinary. On the other hand a drop to 1050 would likely produce another 30-40% loss in miners.

      1. mike trike

        My Canadian miners have done exceptionally well this year, except for the one that is part of GDX.
        That is the reason I buy individual miners and not GDX or GDXJ, which are for day traders who don’t spend the time doing due diligence on individual miners.

        When people think of miners they only think of HUI, GDX, GDXJ etc. Stay away from those ones and look for quality juniors with management and shareholders who will support their companies.

        People getting into the stock market now have the same risks as people who got into silver over $40. Small upside and huge downside.

        This chart tells me to stay away from the stock market:

    2. Roy

      That has been true for several years, Jay. How’s it worked out for you? The whole point of the article is to stop trading that hypothesis and start trading the fact the equities are a raging bull.

      They won’t be forever. Don’t trade them without stops. Don’t put your life savings in SPY LEAPS 2 years out and 20 strikes out of the money, then turn off your computer expecting to turn it on as a billionaire in 2016. But for crying out loud, open your eyes, stop trying to pick bottoms in oil and gold, and embrace the love the Fed is trying to send your way.

  4. Yogigyani


    Are you saying that if bubble starts then SnP can go 2100,2200, …2400,…,..but we should take profit around end of Jan as it is hard to guess perfect top?

    1. gary Post author

      I will take profit when the Nasdaq reaches 5100 as that could trigger a sharp intermediate correction. But I will also buy the bottom of that correction.

  5. Huckleberry Finn

    Bottom’s in for gold stocks at least. Major bull markets have always started with Gold stocks leading many months ahead of Gold. Even if CRB bottom is due in March you are going to miss a huge move in GDX between now and end of March. I am thinking at least $25 by then.

    1. M.D.Cov

      I doubt that…….GDX has another up day topping near $19 then eventually heading into the $12’s.

      ANOTHER bear trap IMHO.

      1. Huckleberry Finn

        Could be. I think the tax loss selling is creating false patterns. The sector is washed out and we will see $25 very quickly. Falling oil is a tremendous tailwind to their cost structure.

        1. M.D.Cov

          TODAY’s volume ACROSS the board was LOWER than normal hence no conviction just a false flag……. for the most part the third week of December CHANGED bearish and if it wasn’t for overnight manipulation metals would’ve been slammed LOWER. MY hunch says it’s a “bear trap” but that’s the beauty of Wall Street for every buyer there’s a seller hence someone’s win is another one’s loss and vice versa……. and the beat keeps on going.

          These metals LATELY have gotten the best of me so I’ve learned to play it via momentum swing trading rather than day trading OR long-term holding. Like Gary advises to “avoid” this sector until the “metal settles”.

          1. Huckleberry Finn

            I think GDX before Gold and Silver and Gold and Silver before the rest of the commodity complex. So I am buying. Could it go to $12? I doubt it but I would be buying more. I think we go much higher ultimately and I don’t think I am smart enough to buy the exact bottom.

  6. gary Post author

    I think I’ve decided to just let the first intermediate cycle go by and see if gold can make a higher intermediate high. When it does then I will buy the next intermediate cycle low aggressively. In the meantime the easy money is in the stock market.

    1. Roy

      Exactly. I spent some time in the last few days looking at the SNP chart since 2009 and asking “if I had waited out the first IC to verify that it made a higher low and the bear was over, and then gotten long, how sad would I have be now about the profits I missed during that one IC?” The answer is: “not very”.

      When the gold bull starts, there will be lots of time to get on board. Years. I quit trying to catch that falling knife more than a year ago, and the money I have not lost as a result more than makes up for the money I will not make when I sit out the first IC (at least) and make the PM market prove to me that the trend has changed.

  7. Pingback: Wall Street National | The bubble that lurks in 2015 - Wall Street National

  8. R. J.

    Extremely well prepared and cogent article. The only question is, when will the government bubble pop? I mean, does anyone think that we’re going to pay back over $18 trillion of debt, and over $200 of unfunded liabilities?

    The high-flying stock market’s present value relative to GDP is higher than before the 1929 market crash. In addition, there’s an estimated $1.5 quadrillion in derivatives worldwide at the moment. That’s literally 10 times the global GDP. And if one thinks the ‘too big to fail banks’ bailed out by the Fed are healthier now, than I have news for you: they are bigger and more leveraged, far beyond there 2008 pre-crash levels.

    In case anyone is interested:
    When Will The Government Bubble Pop?

  9. Tony

    The dollar move DXY and it’s possible rise back to 120 from 90 must be frightening for Gold / commodity bulls.

  10. David

    Nobody seems to be talking about expanding margins for miners in non US currencies. After wages, energy is their biggest cost. Today gold is priced at C$1440/ oz and is well over 1000 Euros. For European or Canadian investors this seems like the time to buy quality miners cheap. No one seems to be looking.
    Americans are indeed stuck with their rising greenback.

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