35 thoughts on “Gold & stocks

  1. Steffmeister

    Cheer up Gary, you sound a little bit down or you got a bad cold.

    Here is how I see it, looking at the American indices they are all in a final 5th wave up. We are getting close to a major correction and that is in line with some very skilled analysts out there. The 17year cycle is about to kick in any day/month now.

    My predictions for 2017:

    Stockmarket top in April-Q3 at the latest 2017
    Bondmarket top Nov-Dec 2017
    Gold&Silver, a very good trading opportunity from midsummer. I am looking at several miners to buy at that point in time. Late June, late July or late August maybe. Scaling in three times might be a good strategy during the summer of 2017.

    So yes I am one happy camper right now 🙂 just sitting back and relaxing, no foolish bullish a bearish moves at the moment. I am one stubborn grinding trader!

    I will save this post for future reference, just for the fun of it.

  2. Emptyness

    Gary, your point of view sounds plausible – nevertheless I don’t think it will become true. Look at the GDPNow forecast (at the moment below 1 % !) and the step by step rising inflation – it smells like stagflation. And that’s no good basis for a stock market bubble – but it’s really good for gold !
    My forecast: Stock markets are going to rise slowly without making a bubble, and if we get a recession I expect a stock market collapse. Gold oscillating up and down for several months, no later than autumn it will break out because of manifesting stagflation.
    I wish you good health !

    1. Gary Post author

      I tend to ignore the perma bear types like Mish. They’ve been looking for the next recession for 8 years now.

      Bottom line: if the economy really sucked like these folks would like us to believe then consumer confidence would be trending lower. But it’s been steadily trending higher ever since the bottom in 2009.

      No we aren’t growing at 4%. For that to happen we would need a new paradigm industry, something like the personal computer in the 80’s and the internet in the 90’s. In lieu of that the Fed has printed a lot of money and kept interest rates too low. I would say this isn’t a bull market driven by GDP growth, it’s a bull market driven by low interest rates and free money.

  3. Alexandru Popovici

    still lurking for the short-cotton trade.
    it may not come until CRB index (and oil) complete their dead-cat bounce next week.
    I would love to see a higher high in cotton first, to confirm exhaustion and over-complacency.

    1. WallStreetJesus

      Sugar had a pretty good day on Friday after running all the stops to close up on the day. Keep an eye on sugar.

      Cocoa is also worth keeping an eye on since its down the most year over year of all the commodities.

    2. Adrian

      I’m Short right now Natural Gas with a 1:152 CFD, short it at 3.074, now my stop loss, it seems there is a HS in play and the Put Call Open Interest hit 100 and rolling over.
      I could short XLY this week.

  4. Dreamer

    Will the low interest rates and free money ever stop?

    No, they would rather play the inflation hand then the deflation hand unless they want to make Trump the new Herbert Hoover. And this won’t happen because the 1 percent do not want to lose their paper wealth that they are so proud of.

    1. Don

      Someone asked what is the difference between a log and linear scale. Big diff, on a linear scale, the crash of 1987 looks like a small blip. whereas today, the same percentage (25% , I believe( ) would be a huge drop. On a log scale, the percentages get the same movement on the graph. Log charts are much more informative, especially over long time frames.

      1. Steffmeister

        Do not forget the decay in currencies, inflation adjusted the chart would be even less pleasing to read. Maybe the dollar has lost 30% from year 2000. Fiat currency is a crappy “innovation”.

        I do not expect a crash in stockmarkets, but a greater correction for maybe a year. NIKKEI is a different animal, Japan has run out of steam after 25 QE’s. I think NIKKEI will decline into oblivion with a correction of 70% or more.

      2. HomerJ

        Don,
        I didn’t ask what the difference is, the question was rhetorical.
        The dataset is the same, only the chart’s
        presentation is different, numerically, a 25% drop is the same in either one.
        And that is why, to me, there aren’t any advantages having a log over lin.

        1. Don

          Got that Homer. But just in case someone else is confused, allow me to present the difference between linear and log scales in another way. With the S&P currently at 2380, a 30 point increase is no big event as it is only a 1.2% percentage increase. However, that exact same 30 point increase in 1980 would have been a huge deal because it would have represented a 30% increase on an index that was only at 100. Linear graphs may make sense to some but there is no getting around the fact that a linear graph presents a distorted ‘picture’ . With a log graph, a 1. 5 or 10 percent move produces the same chart movement no matter what the time frame.

  5. Don

    The percentage movements of the stock market, when looking at weekly or monthly data, are much smaller now than what they were back during the years 1998-2008. This state of very low volatility is reflected in the VIX and is typical in the late stages of a bull market. It should be noted that volatility doesn’t always appear only in bear markets but can also show up in the final bubble phase of any market. So, Gary may be correct when he says the stock market is entering a bubble phase that will send the indexes accelerating upward but it is important to remember that true bubble phases are not typical of stock market tops which tend to top out and then roll over over time.

  6. Robert

    Ok let’s talk gold. What’s everyone views this week, Up or down? I have bearish bias because it’s almost getting late in gold intermediate cycle. So upside limited from here

  7. JJHarmen

    Don, what do you think the odds are of the stock market going straight up from here? The charts look to me like they are ready to explode to the upside. Also, are you still confident gold and silver will do well this week?

  8. Don

    I agree that the Nasdaq and S&P look like they are ready to “explode” upward but other indexes such as the Russel 2000 (tracks 2000 small cap stocks) , Valueline (tracks 1675 stocks) and the Wilshire 5000 (tracks 5000 stocks) , are all showing signs of a roll over type pattern, at least on the weekly charts. At a minimum, a correction is in the cards. I think Gary is also expecting a sharp pullback. With respect to the PMs, I have no idea how they will perform next week but in my opinion, they are in bull markets and as Gary has said, all timing errors will be corrected in a bull market. Just don’t get too gung ho on the miners. I am not so sure about them as they may fall in sync with a stock market correction.

  9. JJHarmen

    Thanks for your quick response and opinions. Any chance I could get your email adddress? I would like to communicate more directly, if that is OK with you.

  10. Don

    Sorry, JJ but I don’t want to be writing to individuals as it takes up too much of my time. I have a better idea, how about you give provide your email address and I will contact you if I should get banned or move to a different blog site. Best if you do not to provide your primary address as you could get spammed badly. I am leaving for lunch now so don’t expect further responses for a while. Thanks.

  11. ARends

    I love this wisdom and there fore like to look at an array of people that seem wise with different technical tools and outlook.

    This wisdom comes from:
    Proverbs 11:14New King James Version (NKJV)

    14 Where there is no counsel, the people fall;
    But in the multitude of counsellors there is safety.

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