WHAT HAPPENS WHEN THE STOCK MARKET BUBBLE POPS?

The liquidity will flow into commodities causing inflation…just like it did in 2008. This time the bubble will be in the precious metals market instead of the energy markets though. The metals have held up much better than the rest of the commodity sector. Big money has been accumulating all last year in preparation for what happens when the stock bubble pops. This is why stocks and gold have gone up together for two years. Gold will continue to rise as the bubble in stocks becomes more mature and more and more liquidity starts to move over to the metals in preparation for the stock market implosion that is coming later this year.

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32 thoughts on “WHAT HAPPENS WHEN THE STOCK MARKET BUBBLE POPS?

  1. Christian

    Bluebellkid — So let me get this straight: You wanna SHORT a market that is exhibiting all the signs of a potential bubble?? Really?!

    For someone that is always throwing caution to the wind and never in a hurry to pull the trigger when EVERYTHING (except volume of course) is a screaming buy!! This, without a doubt, is
    completely out of character.

    I like it 🙂

      1. Gary Post author

        Poor old Jimmey hasn’t completed a good trade in a long time.

        He failed to buy gold at the bottom.

        He keeps buying ag which has done nothing.

        And apparently he’s still holding dollars waiting for the dollar bubble. Oops missed that one too.

      2. roadrunner

        jim rogers has been very consistent for the last 5 years. Not buying unless below $1000. or above $1600. But he has not sold any of his gold. And he doesn’t or never has claimed to be a trader. he is long term.

    1. Bluebellkid

      Actually this is what I typed, “I’m keeping an eye on SOXS for a Swing Trade.” If I think I see a good setup I may play it (SOXS) but it would just be a quick trade.

      1. Christian

        But still.. You’re considering it, meaning the thought..

        Better yet, the temptation (like that bodacious girl sitting at the bar) has crossed your mind you little devil 🙂

    2. DaZeD

      Why not buy SOXS at this point? Sounds like a good risk reward trade since we think it’s strong resistance. Your stop is slightly beyond 1362, and if Gary is correct then the reward is potentially fairly good as it’ll probably be one of the more significant pull-backs. Especially when the market hasn’t had a down month for 13 months.

      1. Christian

        You’re betting against a Market that is not only protected by the FED, but also exhibiting all the signs of a bubble in-the-making and you think this is a ‘good risk reward trade’..?!

        Jesus, Mary, Joseph!! I wanna marry you in Vegas and I want Gary to be our Wedding minister.

        1. DaZeD

          Just because it’s a bubble in-the-making doesn’t mean that there will be no short-term, sharp pullbacks. The FED isn’t just going to let dumb money get rich by buying call options all the way up…

  2. Gary Post author

    The Quest is up over 800% while bitcoin has lost 50% since Ted assured us there was no risk in crypto’s.

    It looks to me like there was massive risk.

    As far as I know only one person was able to control greed and keep his gains.

  3. RTTPD

    Gary —–

    One aspect that I’ve not heard mentioned :

    When the next DC in gold commences, it will be about the time that tensions around the world will be ramping up……

    ** The US is training a 30k force of Kurds on the Turkey/Syrian border for the purpose of balkanizing the country and to remain as a long term presence and control the oil in the north eastern corner.

    Erdogan, the Russians,Assad and the Iranians have promised this will not work. Erdogan has already made threats to invade Syria and engage US trainers supporting the Kurds.

    ** The US is starting to move additional military assets into the Korean peninsula.

    The USS WASP which is a amphibius attack ship with stealth capabilities is moving into the area to become part of the task force.

    Additional B2 bombers and sophisticated electronic jamming planes have also been moved into the area.

    So far there have been three errant/false warnings of an inbound missle distributed over emergency public broadcast system. Two in Hawaii and one in Japan.

    ** Fighting in eastern Ukraine is the worst its been in a year, and US trained snipers have been inserted. Russia is holding the biggest exercises since the conflict began and are massing more forces on the border.

    All three of these will ramp up even more by the time Gold’s next daily cycle starts and act as an additional catalyst to promote even greater safehaven buying.

    1. faz

      Doesn’t “Balkanising” Turkey basically mean destroying schools, hospitals, power stations and infrastructure.. pain and suffering for innocents who have never done anything to harm Americans. It’s basically state-sponsored terrorism, right?
      By Uncle Sam. As long as it’s on soil far away from home.
      Maybe the plan is to declare they’re going after the ‘terrorists’ (which they trained themselves) but the ‘terrorists’ will miraculously come out unscathed after all the bombs they drop on the schools and hospitals and bridges have done the work. Raytheon and the other merchants of death will be paid by US tax dollars, and then they will airlift out their terrorists like they did for ISIS recently in Syria after Russia finally had enough of the US talk and went in to give ISIS the boot.

      1. faz

        Terming the murder of innocents (including children) as “sweet”, is pretty cold-blooded Nada. Goes off the scale.

  4. jyoung3759

    Reminds me of a story Art Cashin told about asking his mentor whether he should short the stock market pre-cuban missile crisis . His mentor asked why he would want to do that and insisted the only trade was long because if what they thought might happen did then their trades would be worthless. Probably not as dramatic here but a good point nonetheless.

  5. jyoung3759

    The only thing that moves markets is big money anything else is just a knee jerk reaction that usaually fades like bitcoin .

    1. Americano

      Jyoung,
      You do realize last time Bitcoin had this price was December 3rd?
      That it’s up 10x + YOY?
      Pick a time frame…..ANY TIMEFRAME & it’s UNFATHOMABLE that gold is where it is in light of North Korea, Govt shutdown, Trump, Russia you name it.
      Gold is still born. It’s not even keeping up with inflation.
      If it’s money you’re after & not dental fillings……
      It’s either the stock market or………
      The Mayflower.

      1. Gary Post author

        The problem with bitcoin is that it’s now on its way to 0.

        Pay attention to what is happening. Countries are starting to ban it. Did you really think governments would allow people to create their own currency?

        Anyone with a lick of commonsense could have seen this coming a mile away. But then again during a bubble all commonsense goes out the window when people begin to believe they’ve found the key to free money.

        1. Jim Dandy

          It will be no time at all before all the weaknesses in bitcoin are addressed in a new coin, maybe even a ¨legal¨coin, and then bitcoin becomes history. About every week a better option comes out.

        2. Autobahn

          Gary maybe not yet going to zero.
          I see more and more sophisticated investors and money managers getting behind it.
          For example Tom Lee former JPM head of investment strategies. This is not dumb money or is it smart money acting dumb ? They are saying it’s consolidating getting weak hands out. I feel like most of the crowd joined and got hooked in that month of December when it went from ten to twenty. But it happened so fast . People hardly had enough time to open accounts.

  6. Gary Post author

    This is what a long consolidation will do. It convinces people that an asset is dead, so they miss the move when price starts to rally out of the basing pattern. The bigger the base the bigger the rally. This one lasted a full year.

  7. Jim Dandy

    No worries here, adding on pullbacks, maybe even today if any of my miners or SILJ gets low enough.

  8. THC

    Attachment

    Taking a small short here if we close below the 10MA.
    The 50MA + 0.50% retracement should be a magnet, but also provide solid support.

  9. Gary Post author

    I’m not sure why the comments got turned off. I’m trying to contact my IT guy to get it fixed.

  10. vand

    Look at the 60 year CRB:Dow chart.. commodities are gifting us a once in a lifetime chance at the start of a trend that will last at least a generation.

  11. Sassybabe

    Every time I get back to even on SLV, down it goes. For something that is supposed to be in a bull market, silver has been a big disappointment. Maybe this time the sell off will be short lived.

  12. Sassybabe

    I have been watching the comments and I think that awful man (pedestrian) is back with a new name.

    1. Nada

      You think Ted is Ped? I dunno about that one. Ted is short and sweet with his comments. Ped is as long winded as they come.

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