tag:blogger.com,1999:blog-59124414165059687482024-03-13T07:40:39.712-07:00The Smart Money TrackerA financial blog on investing in stocks, commodities and the gold bull market.Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comBlogger752125tag:blogger.com,1999:blog-5912441416505968748.post-55058497681169868722010-03-07T08:20:00.000-08:002010-03-30T03:23:49.963-07:00NEW SMT ADDRESS<span style="font-size: large;">I'm starting to get a ton of spam on the blog lately so I've decided to try moving the blog to a new address. The new address will be easier to remember anyway :) <a href="http://www.smartmoneytracker.blogspot.com/"><span style="color: blue;">www.smartmoneytracker.blogspot.com</span></a></span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-76281473631968222682010-03-04T16:06:00.000-08:002010-03-05T21:09:45.608-08:00THE STRONG BROTHERS ARE LEADING THE CHARGE<span style="font-size: large;">During the 01-08 stage of the commodity bull platinum was the strong brother of the precious metal complex. Where he led the rest of the complex followed. </span><br />
<br />
<span style="font-size: large;">Well platinum is at it again, only this time he's got help. Palladium is also leading the charge higher. Both metals have eclipsed their December highs. As a matter of fact both metals have been so strong that the 50 day moving average never even turned down during the recent correction.</span> <br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S5BJX0FyrPI/AAAAAAAAC3E/9R7Xdj_JtzI/s1600-h/plat.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S5BJX0FyrPI/AAAAAAAAC3E/9R7Xdj_JtzI/s640/plat.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S5BJeS5JVII/AAAAAAAAC3M/uy-a8leHPwQ/s1600-h/pall.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S5BJeS5JVII/AAAAAAAAC3M/uy-a8leHPwQ/s640/pall.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">We still need to see gold rally above $1161 to break the pattern of lower lows and lower highs but the action in platinum and palladium is suggesting this C-wave still has further to go</span>.</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">I suspect how the dollar reacts to the employment figures tomorrow will probably give us a big clue as to the next move in gold. Ironically I suspect a poor jobs number is going to be more bullish for the markets as it will probably depress the dollar.</span> <span style="font-size: large;">Perhaps even completing a weekly swing high which is one of our requirements for a continuation of the C-wave. </span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-39688611168979748852010-03-03T06:42:00.000-08:002010-03-03T06:42:18.710-08:004 DAY RULE<span style="font-size: large;">Yesterdays rally completed a 4 day rule possible trend change. (4 days in a row counter to the trend after a long intermediate move often signals a trend change.)</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S450aRtnEMI/AAAAAAAAC20/NkLoHrIhczU/s1600-h/gold.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="396" kt="true" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S450aRtnEMI/AAAAAAAAC20/NkLoHrIhczU/s640/gold.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">We also have the same signal in the miners which in my opinion is more important as the miners have been the laggards in this sector. We need to see the miners leading this rally. </span> </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S451JStJN3I/AAAAAAAAC28/FJrVHCwnMJY/s1600-h/hui.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="396" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S451JStJN3I/AAAAAAAAC28/FJrVHCwnMJY/s640/hui.png" width="640" /></a></div><br />
<span style="font-size: large;">If the trend break can hold into the close that will be another big step in the right direction towards confirming a continuation of the C-wave.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-33786827503730633442010-03-02T04:55:00.000-08:002010-03-02T04:55:45.907-08:00THE FOUR KEYS<span style="font-size: large;">I'm still sitting on the fence as to whether gold is stuck in a D-wave decline or whether this has been a very tricky midpoint consolidation. I will say the recent strength despite a strong dollar is very encouraging.</span><br />
<br />
<span style="font-size: large;">There are four important requirements that have to happen before we can say with a high degree of confidence that the C-wave is still in play.</span><br />
<br />
<span style="font-size: large;">The single most important is the dollar. We simply must see the intermediate dollar cycle top. No C-wave has been able to fight a rising dollar. The dollar is getting late enough in the intermediate cycle that it could put in a top at any time.</span><br />
<br />
<span style="font-size: large;">The next requirement is for gold to put in a right translated daily cycle. If this remains a D-wave then all daily cycles should be left translated. If gold can eclipse $1131 this week then we will have a right translated cycle and that shouldn't happen in a D-wave decline.</span><br />
<br />
<span style="font-size: large;">The next hurdle is the $1161 level has to be surpassed. Gold has to break the pattern of lower highs and lower lows. It will do that if gold can top $1161. That will also eliminate the December trough as the intermediate cycle low and move the phasing to February. That is very important as it will mean gold is on week 4 of the cycle instead of week 10. That would give gold 6 more weeks for the second leg to progress.</span><br />
<br />
<span style="font-size: large;">And finally we need the miners to start participating. If the HUI can cut through the 420 resistance level that will be a big step in the right direction. If miners can break out to new highs along with gold all resistance in the gold market will be out of the way and the path will be clear for the second leg of the C-wave to rack up another monster move.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-89571562445641956912010-02-27T07:58:00.000-08:002010-02-27T08:54:13.116-08:00DOLLAR KEY<span style="font-size: large;">A while back I asked the question </span><a href="http://garyscommonsense.blogspot.com/2009/12/can-markets-and-dollar-rise-together.html"><span style="font-size: large;"><span style="color: blue;">"</span><span style="color: blue;">Can the markets and the dollar rise together?"</span></span></a><span style="font-size: large;"> They certainly weren't able to do it during the last cyclical bull and they haven't been able to do it so far during this one.</span><br />
<br />
<span style="font-size: large;">In the next chart you can see that just as soon as the dollar bottomed gold's C-wave ended. The stock market managed to drift a bit higher due to seasonality and momentum, although I will add that the last little spurt higher in December and January occurred as the dollar was correcting into a daily cycle low.</span><br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4lB6zYIOEI/AAAAAAAAC2s/NN298EQvDAo/s1600-h/dollar+key.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4lB6zYIOEI/AAAAAAAAC2s/NN298EQvDAo/s640/dollar+key.png" width="604" /></a></div><br />
<div class="separator" style="clear: both; text-align: center;"></div><br />
<span style="font-size: large;">The fate of the markets now rests with the dollar. If Ben can get the dollar headed back down assets will head back up. If not we are going to continue to flounder around until the full forces of the secular bear grab hold of the market again and suck it back down.</span><br />
<br />
<span style="font-size: large;">The problem is that public opinion has turned against stimulus and printing at the moment. So it's going to be hard to rationalize more printing. (I will add that the government has figured out they can still sneak in more stimulus as long as they don't call it stimulus. Now it's a jobs bill.) If however things start to weaken appreciably public opinion will quickly shift back to "<em>do whatever it takes to fix the problem</em>".</span><br />
<br />
<span style="font-size: large;">Sooner or later that <em>is</em> going to happen. Of course if we want to see another leg up in the C-wave we need it to happen quickly. Actually because we are running out of positive seasonality (no C-wave has topped later than early May) we probably need to see the dollar top next week. </span><br />
<br />
<span style="font-size: large;">I'm going to say if we don't put in a weekly swing high on the dollar chart next week then we can probably kiss any more thoughts of a C-wave continuation good bye. </span><br />
<br />
<span style="font-size: large;">At that point we will just have to twiddle our thumbs for another month or two as we wait for the A-wave to begin. </span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-64015474551332744612010-02-26T11:24:00.000-08:002010-02-26T11:24:37.370-08:00<span style="font-size: large;">Maybe this will help understand why I did what I did.</span> <br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S4geo9BbkaI/AAAAAAAAC2c/lW2CRML7ubo/s1600-h/gldslw.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="566" kt="true" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S4geo9BbkaI/AAAAAAAAC2c/lW2CRML7ubo/s640/gldslw.png" width="640" /></a></div><br />
<span style="font-size: large;">If you understand how the 4 wave structure in gold works you will understand why I want to take some profits out of the C-wave. If I hold on to a winner it will just get dragged down by the extended corrective process after the C-wave tops and will turn into a loser and then it will be dead money for many months as the next C-wave builds a base.</span><br />
<br />
<span style="font-size: large;">If I have some dry powder then I can put that powder to work in the A-wave advance, which while it won't make new highs could still be good for a 40-50% gain in a stock like SLW as long as I get in close to the bottom of the A-wave, which isn't too hard to do if one watches the COT report. That's a much better use of my capital than just watching one of my winners bump around for months.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-44274345065382885542010-02-26T07:58:00.000-08:002010-02-26T08:14:32.977-08:00LINES IN THE SAND<span style="font-size: large;">If gold is now stuck in a D-wave decline all daily cycles should be left translated. By that I mean if a cycle averages 20-25 days trough to trough any cycle that tops in 10-12 days or less would be a left translated cycle.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S4ftjJLnelI/AAAAAAAAC2E/uiF5Y7vR-1E/s1600-h/left+cycle.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S4ftjJLnelI/AAAAAAAAC2E/uiF5Y7vR-1E/s640/left+cycle.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Gold is now sitting on the fense. At the moment the cycle appears to be left translated with the top occuring on day 10. </span></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><span style="font-size: large;"></span><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4fuBNvpcnI/AAAAAAAAC2M/oelZENmkx1c/s1600-h/gold.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4fuBNvpcnI/AAAAAAAAC2M/oelZENmkx1c/s640/gold.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">It that top holds we should expect gold to drop below $1044 at the next cycle low.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">If however gold can move above $1131 in the next few days we will have a right translated cycle in play. That should not happen in a D-wave decline. The play then would be to get aggressively long at the bottom of the next daily cycle low.</span></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S4fvjYhfYMI/AAAAAAAAC2U/rOroelaq9M0/s1600-h/long+play.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S4fvjYhfYMI/AAAAAAAAC2U/rOroelaq9M0/s640/long+play.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-40888715010754653302010-02-25T21:19:00.000-08:002010-02-25T21:19:06.251-08:00CYCLICAL BULL VS. SECULAR BULL<span style="font-size: large;">The reason I don't want to mess with the stock market at this time is because it is in a secular bear market. Any rallies are always going to eventually be doomed to failure in this environment. Now that doesn't mean the cyclical bull is finished. I doubt it is. What it does mean is that one can't make a timing mistake and expect to be rescued by the secular trend.</span><br />
<br />
<span style="font-size: large;">For instance; from 1982 till 2000 the stock market was in a secular bull market. The fundamental driver for that bull was the personal computer and the internet. Those were world changing new technologies. Millions and millions of jobs were created during this period.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S4YOLqNV2OI/AAAAAAAAC1s/x04CQdCL9Yg/s1600-h/spx.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S4YOLqNV2OI/AAAAAAAAC1s/x04CQdCL9Yg/s640/spx.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">There were certainly nasty corrections during the secular bull, 1987 was an example. But the secular trend was up. So as long as one was willing to hold on to ones position any entry would eventually end up being a winning trade. Like I've said before the only way to lose money in a secular bull market is to buy high and sell low. (I seem to be having trouble getting that point across lately). In a secular bull market there's nothing wrong with buying high as long as you sell higher. That means sometimes you have to be patient and let your positions work. Sometimes you have to endure drawdowns.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Ultimately though as long as you don't sell for a loss then every position will end up a winner (I'm talking index ETF's not individual companies)</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">The problem with the stock market since 2000 is there is no longer a fundamental driver to produce a secular bull. Now all we are getting are phoney bull markets built on money printing. Those are not the kind of fundamentals that can support a sustainable bull market. So what happens? Eventually the false fundamentals fail and the market collapses. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">The Fed is now at it again trying to build another bull market on a fundamental base of nothing more than trillions of dollars of liquidity. It didn't succeed when Greenspan tried it and it's not going to succeed for Bernanke.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Until we get the next fundamental driver (personal computer, internet 1982-2000: electronics 45-66: automobile 20-29: trains in the late 1800's) we are not going to have another secular bull market for stocks.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">There is a secular bull market that does florish on a fundamental base of money printing though. That secular bull would be commodities in general and precious metals specifically.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4YQ71aL-sI/AAAAAAAAC10/8D9h4J2aAss/s1600-h/gold.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4YQ71aL-sI/AAAAAAAAC10/8D9h4J2aAss/s640/gold.png" width="640" /></a></div><br />
<span style="font-size: large;">Gold is in a secular bull market. That means several things. First off we can expect this bull to continue until the fundamental driver is taken away. That means the presses have to be turned off. Second, any entry will ultimately turn out to be a winning position as long as one is willing to hold on till the bull corrects any timing mistakes. </span><br />
<br />
<span style="font-size: large;">The one area where investors can rely on the buy and hold strategy at this time is in the precious metals markets and will be for quite some time yet. </span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-46782381044361367312010-02-25T07:12:00.000-08:002010-02-25T07:12:20.763-08:00GOLD'S A-B-C-D WAVE STRUCTURE<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S4aTS9V8BaI/AAAAAAAAC18/ADKHgH1o-H0/s1600-h/abcd.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S4aTS9V8BaI/AAAAAAAAC18/ADKHgH1o-H0/s640/abcd.png" width="640" /></a></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-80215393711958342962010-02-24T15:23:00.000-08:002010-02-24T16:16:58.060-08:00THE BULL IS STILL ALIVE<span style="font-size: large;">I believe the secular gold bull is still intact. As long as I believe that to be a fact then I have to ask what's the point in selling losing positions and locking in a loss?</span><br />
<br />
<span style="font-size: large;">If I had sold my losers in April they would never have had a chance to become profitable. The same for July, Sept. and Oct.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4WxtFGvAkI/AAAAAAAAC1c/NUAppraPcTM/s1600-h/hui+losers.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4WxtFGvAkI/AAAAAAAAC1c/NUAppraPcTM/s640/hui+losers.png" width="640" /></a></div><br />
<span style="font-size: large;">The only difference between now and then is the time I think it's going to take for my positions to become profitable. </span><br />
<br />
<span style="font-size: large;">Since I think gold has now entered a D-wave I may not get the quick rebound on underwater positions that I got over the last year but that doesn't mean I need to throw out a winning hand. It just means these particular positions are going to need more time to work before they move into the green. I'm willing to give them all the time they need.</span><br />
<br />
<span style="font-size: large;">I'm not overlooking the fact that a D-wave is followed by an A-wave that should at least test the $1161 pivot. I'm also not overlooking the fact that the last three A-waves produced HUI gains of 18%, 37% and 116% gain in 1 month, 1 month and 3 1/2 months respectively. </span><br />
<br />
<span style="font-size: large;">As miners are still incrediably cheap we should see the HUI come close if not better the highs at the next A-wave top. Especially if oil continues to hold below $100. At the least they should test the 475 pivot that they were at during gold's last move back up to $1161.</span><br />
<br />
<a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4W02ymQOnI/AAAAAAAAC1k/ytSEeRjSR2A/s1600-h/hui+pivot.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="608" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4W02ymQOnI/AAAAAAAAC1k/ytSEeRjSR2A/s640/hui+pivot.png" width="640" /></a>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-59848863494888844762010-02-23T19:56:00.000-08:002010-02-23T20:01:11.303-08:00C-WAVE OR D-WAVE<span style="font-size: large;">I've been racking my brain tonight trying to decide if gold is still in a C-wave or whether a D-wave has managed to sneak right past me without me ever noticing.</span><br />
<br />
<span style="font-size: large;">On one hand the C-wave never really generated the kind of excessive speculation we normally see at C-wave tops. The silver gold ratio never spiked, miners never even got to normal valuations much less expensive, which is what would be expected as gold fever hits hard at C-wave tops.</span><br />
<br />
<span style="font-size: large;">The massive year and a half consolidation only spawned a meager 190 point new high? That doesn't sound like a C-wave top to me. We had the most powerful A-wave, along with the weakest B-wave of the entire bull market so far and all it could gain was 190 points above the old highs? Hard to believe.</span><br />
<br />
<span style="font-size: large;">Trillions and trillions of dollar printed and thrown at the market and all we got was 190 points? Again hard to believe.</span><br />
<br />
<span style="font-size: large;">We even have a broken trend line.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4SgG1ulbUI/AAAAAAAAC08/7ViDnSdxz78/s1600-h/gold+trend.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4SgG1ulbUI/AAAAAAAAC08/7ViDnSdxz78/s640/gold+trend.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Despite a very strong dollar gold is still holding well above the lows.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Everything seems to be saying this is still a C-wave...except the miners. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">The HUI should have broken through the 420 resistance like a hot knife through butter. It should be breaking the down trend.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S4Sgoo2vzGI/AAAAAAAAC1E/t_8J9K0oZNU/s1600-h/hui.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S4Sgoo2vzGI/AAAAAAAAC1E/t_8J9K0oZNU/s640/hui.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">It hasn't done either. Instead it immediately turned tail as soon as it got short term overbought and has now closed back below the 200 DMA.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">We have two lines in the sand. If gold can break the pattern of lower lows and lower highs by moving above $1161 then the odds are the C-wave is still intact. If however it moves back below the Feb. low we are almost positively caught in a D-wave.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S4Shcj2fs3I/AAAAAAAAC1M/BbC3o130YTI/s1600-h/gold+daily.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S4Shcj2fs3I/AAAAAAAAC1M/BbC3o130YTI/s640/gold+daily.png" width="640" /></a></div><br />
<span style="font-size: large;">Which ever way gold breaks out of the box should tell us were we stand. I will say that if this is a D-wave we should be getting close to the bottom. I would expect a test of the 65 week moving average and the $1000 mark will probably be about it before the next A-wave gets underway.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S4Sh9xkf8eI/AAAAAAAAC1U/jBnbAwTHD-E/s1600-h/gold+weekly.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S4Sh9xkf8eI/AAAAAAAAC1U/jBnbAwTHD-E/s640/gold+weekly.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Remember the A-wave should test but probably not exceed the highs. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">So at the moment we just have to wait and see which line gets broken first. </span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-78390601849458029482010-02-21T07:13:00.000-08:002010-02-21T07:13:12.150-08:00PROFIT TAKING CORRECTION IS FINISHED<span style="font-size: large;">Since November I've been looking for a profit taking correction of 10-14%. The recent pullback managed 9.2%. Not quite the 10% I was looking for but considering the trillions of dollars sloshing around the world that's probably all we are going to get.</span><br />
<br />
<span style="font-size: large;">All in all I think the odds are very high that the correction has run it's course and we are now beginning the third leg up in this cyclical bull market.</span><br />
<br />
<span style="font-size: large;">I've mentioned before that the initial thrust out of an intermediate cycle low tends to be very powerful. The average gain is between 6-10% in the first 8-13 days before any kind of meaningful pullback can be expected. </span><br />
<br />
<span style="font-size: large;">We seem to be right on track as we've rallied 6.5% trough to peak so far.</span> <br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S4FKIkjKBCI/AAAAAAAAC0s/T1ItgEMjDOg/s1600-h/trendline+break.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S4FKIkjKBCI/AAAAAAAAC0s/T1ItgEMjDOg/s640/trendline+break.png" width="640" /></a></div><br />
<span style="font-size: large;">There is so much liquidity in the market that neither the March bottom nor the July intermediate correction were tested. I don't have a lot of confidence that we are going to test the Feb. 5th low either. </span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S4FKSUdSGlI/AAAAAAAAC00/JVVC4i0y8uo/s1600-h/spx+initial+thrust.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S4FKSUdSGlI/AAAAAAAAC00/JVVC4i0y8uo/s640/spx+initial+thrust.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Now I don't know if we are going to rally 17% like we did out of the July bottom but I will say the dollar is way overdue to move down into the daily cycle low and probably begin the move into the intermediate low also. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">When the dollar starts down it's going to be like putting afterburners on the markets.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">At this time all the signs are in that we are in the initial thrust out of a major yearly cycle low. Holding shorts in that kind of environment is terribly risky. One certainly doesn't have to be long (although this is when the biggest gains come the quickest) if they don't trust the move, but you certainly don't want to get kicked in the teeth standing in front of the bull. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">This is one of those times when the best option for bears is to do nothing and just sit in cash. </span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-33177147596794422342010-02-19T07:02:00.000-08:002010-02-19T07:51:37.211-08:00WHICH SIDE OF THE ESCALATOR ARE YOU GOING TO CHOOSE?<span style="font-size: large;">A bull market is like a rapidly rising escalator. Now one can certainly run down the up escalator but it's not the most efficient way to travel (invest). </span><br />
<br />
<span style="font-size: large;">The same can be said for a bear market. Why would anyone want to run up the down escalator?</span><br />
<br />
<span style="font-size: large;">Doesn't make a lot of sense does it. Any intelligent person would just step on and go for the ride. But this is exactly what most retail investors do. They repeatedly try to short bull markets or go long in bear markets.</span> <br />
<br />
<span style="font-size: large;">And for whatever insane reason they seek out contrary opinions to support their position. </span><br />
<br />
<span style="font-size: large;">Folks in a bull market you don't listen to the likes of Mish, Karl Denniger or Xtrends. Doing so will destroy your account. And I don't say that because I think what they say is untrue. Many of the things they talk about are absolutely true. The problem is that we are in a cyclical bull market, the escalator is running uphill, so negative fundamentals don't matter.</span><br />
<br />
<span style="font-size: large;">You pay attention to permabears when we are in a bear market. In a bull market you take advise from perma bulls. </span><br />
<br />
<span style="font-size: large;">The escalator is running uphill. Now is not the time to try and get to the bottom. It's time to relax and take the ride to the top.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-21420705194881630562010-02-18T19:48:00.000-08:002010-02-18T19:48:27.799-08:00MUCH ADO ABOUT NOTHING<span style="font-size: large;">Last night it was the news that the IMF was going to sell 191 tonnes of gold. Tonight it's the 25 basis point rate hike in the discount rate.</span> <br />
<br />
<span style="font-size: large;">I'm going to let you in on a secret. Neither one of those things is going to materially affect the stock market or the gold market.</span> <br />
<br />
<span style="font-size: large;">As a matter of fact over 75% of the time the market ends up higher by the third day after an initial hike in the discount rate. The Chicken Little's of the world see the sky falling but the reality is this has been a positive for markets almost 8 times out of 10.</span><br />
<br />
<span style="font-size: large;">Folks I'm going to let you in on a secret. The damage has already been done. The trillions of dollars the Fed has pumped into the market is not going to be withdrawn by a mere 25 basis point hike in the discount rate. By the way the discount rate is the rate the Fed charges banks to borrow. Very few banks even bother to borrow from the discount window. For all intents the rate hike today was basically the same as the Fed jawboning. All bark and no bite.</span><br />
<br />
<span style="font-size: large;">If the Fed really wanted to withdraw liquidity they would have to go on a massive treasury selling spree. The problem is this would crash the bond market, spike rates, and drastically raise the cost of servicing our massive debt mountain. If the Fed were to do that, just the interest payments on our debt would soon sink the country. Not to mention it would still take months and months if not years to reverse the liquidity mess they created. </span><br />
<br />
<span style="font-size: large;">They didn't cram 12 trillion dollars into the market in one day and they certainly won't be able to withdraw it in a day. </span><br />
<br />
<span style="font-size: large;">The truth is there is no easy way out of this mess the Fed has gotten us into. I can tell you that human nature being what it is, I'm confident we will continue to kick the can down the road for as long as possible. So I wouldn't count on the Fed withdrawing liquidity anytime soon.</span><br />
<br />
<span style="font-size: large;">The reality is that the market is bouncing out of an intermediate and probably a yearly cycle low. Those kind of major cycle lows tend to produce the most powerful rallies. The average initial thrust out of an intermediate cycle low has been between 6% and 10% in 8 to 13 days. And that is just the initial thrust.</span><br />
<br />
<span style="font-size: large;">So far the market is behaving exactly as expected.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S34Hr1g2U0I/AAAAAAAAC0c/zG4Y_GxkOHU/s1600-h/spx.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S34Hr1g2U0I/AAAAAAAAC0c/zG4Y_GxkOHU/s640/spx.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S34Hv_3j-JI/AAAAAAAAC0k/qZkvmZKP_-Q/s1600-h/rut.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S34Hv_3j-JI/AAAAAAAAC0k/qZkvmZKP_-Q/s640/rut.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Don't forget we still don't have anything that looks like a daily cycle bottom on the dollar yet. This is what the markets have done in the face of a strong dollar. When the dollar decides to move into the daily cycle low we could literally see all markets explode higher still.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">It's going to take a lot more than a mere 25 point hike, in a virtually meaningless interest rate, to derail the kind of powerful rally that happens out of a yearly cycle low. </span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-86292348211597405952010-02-18T03:24:00.000-08:002010-02-18T03:24:49.973-08:00WEAK EURO DOESN'T EQUAL STRONG DOLLAR<span style="font-size: large;">The Fed has printed literally trillions of dollars in an ill fated attempt to jump start the economy. Folks it's not fundamentally possible to have a strong dollar with that kind supply. </span><br />
<br />
<span style="font-size: large;">If one looks at a chart it does appear that the dollar is rallying. But is it really, or is the Euro just falling?</span><br />
<br />
<span style="font-size: large;">When measured against a stable source of value the dollar is actually losing value rapidly. </span><br />
<br />
<span style="font-size: large;">Just since the Feb. 5th bottom oil has rallied 12%, gold 8% and copper 17% despite the illusionary strength in the dollar.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S30iAvNR5hI/AAAAAAAAC0U/J91LsmVDdMM/s1600-h/spxgolddollar.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="640" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S30iAvNR5hI/AAAAAAAAC0U/J91LsmVDdMM/s640/spxgolddollar.png" width="426" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Far from being strong, the dollar just happens to be a slightly better choice than the Euro right now. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Consider that the sentiment on the dollar has now reached extreme bullish levels and the Euro bearish extremes. Plus the dollar is moving deep into the intermediate cycle and at jeopardy of an intermediate trend change at any time.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Once the dollar cycle tops commodities are set up to explode higher.</span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-47127899300555291762010-02-17T07:18:00.000-08:002010-02-17T12:58:56.181-08:00THREE'S A CHARM<span style="font-size: large;">Today I'm going to forward a theory of where I think we may be headed based in part on what happened under similar fundamental conditions in Japan during the `90's.</span><br />
<br />
<span style="font-size: large;">I've been saying since November we should expect a profit taking event of around 10% that would ultimately separate the second leg of this cyclical bull from a potential third.</span><br />
<br />
<span style="font-size: large;">While the recent correction didn't quite reach the 10% level I was looking for, I think at -9.2% it was close enough considering the trillions of dollars the Fed has thrown at the markets.</span><br />
<br />
<span style="font-size: large;">Under similar conditions in `04 with Greenspan madly pumping liquidity the market only managed an 8.8% correction.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S3wCDXtqyvI/AAAAAAAACzs/0dVsAZSYyfo/s1600-h/spx+correction.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S3wCDXtqyvI/AAAAAAAACzs/0dVsAZSYyfo/s640/spx+correction.png" width="640" /></a></div><br />
<span style="font-size: large;">So all in all I think we probably now have our corrective move in place. I'm not ruling out a test of the recent low before heading higher, but I will point out that there is so much liquidity sloshing around the world that neither the March bottom nor the July intermediate low was tested. So I don't think I would bet heavily on a retest of the 1044 bottom.</span><br />
<br />
<span style="font-size: large;">Typically the largest gains in bull markets come at the beginning and end of the bull. Which makes sense as smart money will recognize and jump into the move early as they know that's when the largest percentage gains occur the fastest. </span><br />
<br />
<span style="font-size: large;">At the end of the bull we finally reach a state of complacency that retail investors finally becomes convinced that good times are here to stay. This is the period where smart money unloads to frantic retail buying.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S3wEYEjo4UI/AAAAAAAAC0E/F8ekN9VdHC0/s1600-h/spx+gains.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S3wEYEjo4UI/AAAAAAAAC0E/F8ekN9VdHC0/s640/spx+gains.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">I think we may be approaching an interesting point in this cyclical bull. First off let me show you what happened to the Nikkei during similar fundamental conditions in the `90's.</span></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S3wEzgbR3RI/AAAAAAAAC0M/Di746wupc1g/s1600-h/nikk.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S3wEzgbR3RI/AAAAAAAAC0M/Di746wupc1g/s640/nikk.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Notice how every cyclical bull had at least 3 legs. Also notice how every cyclical bull exploded higher in about 1 year before rolling over again as the secular bear fundamentals eventually pulled the Nikkei back down.</span> </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">I doubt anyone could look at a 10 year chart of the S&P and not come to the conclusion that we are and have been in a secular bear market since 2000. That means this is probably just another cyclical bull within the context of a secular bear market. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">So just like the Nikkei this bull is going to come to an end as the bearish fundamentals will eventually overbalance all the Fed's liquidity just like they did repeatedly in Japan.</span> </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">What I'm wondering is if this cyclical bull will, like the Nikkei, compress the rest of the bull move into a final third leg.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"> <a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S3wEUcXqe0I/AAAAAAAACz8/SLAB5ZJuJZE/s1600-h/spx+final.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S3wEUcXqe0I/AAAAAAAACz8/SLAB5ZJuJZE/s640/spx+final.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">The 1450 target is just a guess, but if the market surges higher we could see the third leg match the point gains of the first leg before finally rolling over into the third phase of the secular bear market.</span> </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Either way, if the Nikkei is any indication, we should have at least one more leg up before this bull expires.</span> </div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-22663759926643749622010-02-15T12:05:00.000-08:002010-02-15T13:28:55.678-08:00I STILL LIKE THOSE APPLES<span style="font-size: large;">The challenge now is that a longer term view will reveal the true relationship between interest rates and gold.</span><br />
<br />
<span style="font-size: large;">You can see from the following chart that gold topped about a year before interest rates entered a multi decade bear market. Gold also began a long term secular bull market 7 years before interest rates bottomed.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S3mkAWPELZI/AAAAAAAACzk/clEhnDuew_o/s1600-h/tyx+long.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="566" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S3mkAWPELZI/AAAAAAAACzk/clEhnDuew_o/s640/tyx+long.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">One can plainly see that each asset class marches to its own fundamental driver. If the last cycle is any indication we shouldn't expect a top in gold until interest rates near the end of the secular bull cycle. Since these cycles tend to run for many years and this one appears to be just starting we could see gold rising for a long time yet using this criteria.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">The truth is that the secular bull will run until it becomes extremely overvalued. At that point liquidity will start to leak out of the commodity markets, specifically gold, and find its way into undervalued assets. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">This will happen when we reach a Dow:gold ratio of 1:1 or close to 1. At that time we will see a buying panic as the public becomes convinced that gold is a "sure thing". Just like they were convinced that tech was a no brainer and just like they believed that real estate never goes down.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Trust me we will see the same mentality in the commodity markets. You want to know how I know? Because human nature never changes. When something goes up long enough and far enough the masses will pile in, they always do. It's how all major secular bull markets end.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">When that starts to happen smart money, money driven by logic instead of emotion, will start to sell gold and go looking for undervalued assets. By that time it will be stocks. Stocks will be so beaten up by then that no one will want to own them. We will see the Dow trading at single digit P/E's. Dividend yields will be between 6 and 10%.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">At that point smart money will recognize true value in good companies that are being given away for pennies on the dollar.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Let's face it no matter how much we want to believe otherwise gold only has value because we say it does. If all the gold in the world were to disappear tomorrow it would only cause a minor blip on the global economy.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Real value is companies producing goods that the world must have to continue. At some point people will start to recognize that gold, a nonessential shiny metal, is being priced completely irrationally and that good companies with real profits making essential products for continued human existence are being given away. At that point the secular trends will flip and gold will re-enter another long term bear market and stocks a new secular bull.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Going back to the chart. Gold is still in a secular bull and that bull has nothing to do with interest rates and everything to do with human nature.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">All in all, I still like those apples :-)</span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-54136879905367148062010-02-14T16:41:00.000-08:002010-02-14T18:40:46.109-08:00NOT QUITE THE APPLES HE WAS EXPECTING<span style="font-size: large;">A comment in the last post challenged me to put up a chart of gold compared to bond yields. I think the poster was somehow insinuating that rising rates are bad for gold. Let's put it to the test shall we?</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S3iXcH6Ad5I/AAAAAAAACzc/y7xutegtVpM/s1600-h/tnx.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="566" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S3iXcH6Ad5I/AAAAAAAACzc/y7xutegtVpM/s640/tnx.png" width="640" /></a></div><br />
<span style="font-size: large;">I don't think any one can deny that gold is in a secular bull market..at least not with a straight face. </span><br />
<br />
<span style="font-size: large;">I now believe that interest rates are also now in a secular long term bull market. As you can see from the chart they have had no trouble rising together since the beginning of the year.</span> <br />
<br />
<span style="font-size: large;">I kinda like those apples ;-)</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-73179828112892779172010-02-14T09:03:00.000-08:002010-02-14T09:05:59.652-08:00THE BOND MARKET IS PRICING IN INFLATION<span style="font-size: large;">If we were really on the cusp of another deflationary event and the end of the cyclical bull like so many bears want to believe, we should already be seeing warning signs in the bond market. </span><br />
<br />
<span style="font-size: large;">At almost every major turning point in the stock market we have seen bonds lead the way. In `07 bonds topped out 4 months before the stock market. The same thing happened in 2000. Bond yields started to rise 3 months ahead of the March bottom in stocks last year.</span><br />
<br />
<span style="font-size: large;">Far from topping out, bond yields are still rising. As a matter of fact they are still holding above a sharply rising 200 DMA.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S3gtaCfrUyI/AAAAAAAACzU/uWqHlQddrDE/s1600-h/tyx.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="566" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S3gtaCfrUyI/AAAAAAAACzU/uWqHlQddrDE/s640/tyx.png" width="640" /></a></div><br />
<span style="font-size: large;">If this was going to be something more sinister than just an ordinary profit taking event in an ongoing cyclical bull, bond yields should have begun dropping several months ago.</span><br />
<div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">I believe we saw the end of the secular bear market in bond yields last year when Bernanke assured us he would artificially hold rates down to stimulate the sagging real estate markets. </span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Realizing that the only way Bernanke could have any chance of accomplishing his goal was to print untold trillions of dollars out of thin air, the bond market responded by rapidly reversing Bernanke's manipulated move and rates have been rising ever since.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Since the beginning of `09 the bond market has been discounting the future and deflation is not what it's been discounting.</span> </div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-29503467630743703982010-02-13T09:39:00.000-08:002010-02-13T09:39:15.588-08:00IS IT REALLY WORTH THE RISK?<span style="font-size: large;">Deflationist can and have offered up countless reasons for their view. I suspect most are trying to rationalize a short position in the market. But I have to ask is it really worth the risk? </span><br />
<br />
<span style="font-size: large;">Let's face it if you managed to catch the exact top and covered at the exact bottom last Friday you would only have profited 9.2%. And realistically I doubt anyone has managed to catch more than 6-7% of the decline. In the last two weeks the HUI has tacked on 11.8%. </span><br />
<br />
<span style="font-size: large;">One is never going to get rich on the short side of the market. Especially not in a cyclical bull. (It is an excellent way to get poor though.)</span><br />
<br />
<span style="font-size: large;">Now we've got a multitude of factors starting to line up in favor of the correction either being over or very close to being over. </span><br />
<br />
<span style="font-size: large;">Sentiment has reached bearish extremes, some even worse than what we saw at the March `09 bottom. </span><br />
<br />
<span style="font-size: large;">The yearly cycle low for stocks is due anytime now (and looks like it may be in). </span><br />
<br />
<span style="font-size: large;">The market has rallied in the face of extremely bearish news this week. Never a good sign for shorts.</span><br />
<br />
<span style="font-size: large;">The dollar's intermediate cycle is due to top any time now. Sentiment on the dollar has reached bullish extremes last seen at the March `09 top. And commercial traders now have the most bearish position on the dollar in the last 9 years. </span><br />
<br />
<span style="font-size: large;">Commercial traders now have the most bullish position on stocks in the last 18 months. </span><br />
<br />
<span style="font-size: large;">The expected 10% decline separating the second leg of the bull from a probable third has more or less occurred. </span><br />
<br />
<span style="font-size: large;">The fundamental picture hasn't changed. The Fed has flooded the world with liquidity and despite tough talk, has made no attempt to withdraw any of it. </span><br />
<br />
<span style="font-size: large;">Finally we are starting to see institutions coming back into the market.</span><br />
<br />
<span style="font-size: large;">With all these factors lined up against the bears and with the relatively small gains possible on the short side compared to the long it's probably not the best of times to continue holding short positions.</span><br />
<br />
<span style="font-size: large;">Now of course if one doesn't believe in the bullish view they certainly don't have to go long but it would be much safer at this time to at least go to cash than to continue holding shorts. The odds are starting to pile up against the bears and it's probably just not worth the risk for a minimal gain even if the bear still has one last roar.</span><br />
<br />
<span style="font-size: large;">Heck even if we have somehow entered another cyclical bear (doubtful) all the factors I've outlined above should lead to a violent bear market rally. </span><br />
<br />
<span style="font-size: large;">The only two rational options right now are long or cash. Pressing shorts at this point is tantamount to gambling, and if one wants to gamble you can find 24 hour action at any casino. There's no need to wait for the stock market.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-76437923541778784302010-02-11T06:27:00.000-08:002010-02-11T08:05:37.342-08:00WEAR YOU OUT, OR SCARE YOU OUT<span style="font-size: large;">When I see the frustration levels that we saw last week amonst gold bugs I know the bull is doing its job. </span><br />
<br />
<span style="font-size: large;">When I see someone slamming body parts in a file cabinet, I know the bull is intact.</span><br />
<br />
<span style="font-size: large;">When I see cavity-boy and his Baby Ruth's I'm confident the bull is still alive and well.</span><br />
<br />
<span style="font-size: large;">These are all signs that the bull is doing what it needs to do to shake off as many riders as possible. And that is exactly what <em>must</em> happen before a big move can begin.</span><br />
<br />
<span style="font-size: large;">I've said it before, the bull will either scare you out, or wear you out. This is how big moves start. They first shake everyone off. They have to make it almost impossible to buy. Just at that point when you feel like you're going to throw up that's when the next leg up begins.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S3QOoFz8n4I/AAAAAAAACys/oIoyvELHEpA/s1600-h/gold.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S3QOoFz8n4I/AAAAAAAACys/oIoyvELHEpA/s640/gold.png" width="640" /></a></div><br />
<span style="font-size: large;">Gold has gone through two scare you out phases and three wear you out periods during the last 4 years.</span><br />
<br />
<span style="font-size: large;">Amazingly enough the bull has now managed to shake just about everyone off and he's done it without even coming close to testing the $1000 level. As a matter of fact he hasn't even tested the $1034 breakout. </span><br />
<br />
<span style="font-size: large;">I think the brief break below $1075 last week was very telling. There had to be a ton of sell stops below that level. You just know every technician in the world was selling at that point. But gold didn't follow through. Someone was buying what the dumb money was selling. If the trend was down gold should have plummetted. If this was a D-wave gold should have crashed. It didn't!</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S3QQ4oj_qMI/AAAAAAAACy0/8JrCZxGk9_c/s1600-h/gold+follow.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S3QQ4oj_qMI/AAAAAAAACy0/8JrCZxGk9_c/s640/gold+follow.png" width="640" /></a></div><br />
<span style="font-size: large;">The miners on the other hand almost always follow the scare you out strategy and this time was no exception. It probably explains how gold managed to create such negative sentiment despite the minor correction.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S3QRfqeZPTI/AAAAAAAACy8/fMuXgoao8wk/s1600-h/hui.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S3QRfqeZPTI/AAAAAAAACy8/fMuXgoao8wk/s640/hui.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">At 11 weeks the dollar is now in jeopardy of starting the decline into the intermediate cycle low at any time. That move, when it starts, should power the second leg of this C-wave.</span></div><div style="text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S3QR1TrhX6I/AAAAAAAACzE/v6HVggWR7K4/s1600-h/dollar.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" ct="true" height="482" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S3QR1TrhX6I/AAAAAAAACzE/v6HVggWR7K4/s640/dollar.png" width="640" /></a></div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><span style="font-size: large;">For those that can hang on to the bull through all his tricks the reward will be big.</span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-22597631912121534332010-02-10T06:09:00.000-08:002010-02-10T06:57:52.611-08:00SECULAR TREND INTACT<span style="font-size: large;">We've been hearing for some time now how the dollar is in a long term bull market. Consequently gold is going down, stocks are going down, commodities are going down, generally it's the end of the world. :-)</span><br />
<br />
<span style="font-size: large;">Nothing could be further from the truth. Despite the worst deflationary event since the 30's the secular trend of the dollar has not changed since 2001. It has been and still is in a secular bear market. </span><br />
<br />
<div style="text-align: left;"><span style="font-size: large;">The only thing that's happening is the normal regression to the mean that occurs in every market. When sentiment gets too bearish we get a counter trend rally back to or close to the mean. Once the market works off the extreme then the secular trend resumes.</span></div><div style="text-align: center;"><br />
</div><div style="text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S3K5Fhm1K9I/AAAAAAAACyk/pVJDiCyzW9Q/s1600-h/dollar.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S3K5Fhm1K9I/AAAAAAAACyk/pVJDiCyzW9Q/s640/dollar.png" width="640" /></a></div><div style="text-align: center;"><br />
</div><div style="text-align: left;"><span style="font-size: large;">Until we discover the next big technological advance (think internet, personal computer, electronics, trains, canals, automobile) the dollar will continue to languish in a long term bear market because the powers that be will continue to try and print their way to prosperity. It's never worked in history and it's not going to work this time either.</span></div><br />
<span style="font-size: large;">Money isn't productivity, it's a store of productivity. We need real productivity before the value of the dollar can enter the next secular bull market. These temporary rallies because of stress in the financial system cannot take the place of real productivity and as such they are never going to reverse the secular trend.</span><br />
<br />
<span style="font-size: large;">We've been hearing quite the cacophony of reasons lately for why the dollar is going higher. The thing is, we always hear this at or close to tops. </span><br />
<br />
<span style="font-size: large;">The fact is that retail traders now have the largest long position on the dollar in history. Large specs, the second largest long position. Meanwhile the largest, most knowledgeable traders, (commercials) have the largest short position in 10 years.</span><br />
<br />
<span style="font-size: large;">As bearish as sentiment was back in November it has now reversed 180 degrees and is now as bullish as it was at the March top.</span><br />
<br />
<span style="font-size: large;">When everyone is thinking the same thing, then no one is thinking.</span><br />
<br />
<span style="font-size: large;">The market is getting ready to hand the bag off to the retail trader again.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-60856294185964947272010-02-08T18:22:00.000-08:002010-02-08T18:32:27.291-08:00HAPPENS EVERYTIME<span style="font-size: large;">Selling pressure at intermediate and yearly cycle lows is intense enough that it takes down just about everything. This time is no exception. Until the market started to crack gold and mining stocks were just going through a mild correction. Gold was consolidating in a T1 pattern.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S3DF1Fiot-I/AAAAAAAACyU/Ol4_djG9sJw/s1600-h/spxminegold.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S3DF1Fiot-I/AAAAAAAACyU/Ol4_djG9sJw/s640/spxminegold.png" width="556" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Once the correction in the stock market has run its course I expect the secular trend for gold to resume and I expect miners to get back to the business of correcting the massive mispricing that occurred when the market crashed in `08. </span></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S3DJF4WFEjI/AAAAAAAACyc/8Gw8DbsyKFY/s1600-h/goldxau.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S3DJF4WFEjI/AAAAAAAACyc/8Gw8DbsyKFY/s640/goldxau.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Right now we are witnessing irrational selling in almost everything, which is par for the course at a yearly cycle bottom.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">For those that can keep their heads about them, wonderful bargains can be had in times like this.</span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-60134749988455789762010-02-08T07:37:00.000-08:002010-02-08T07:37:22.864-08:00IN THE RANGE<span style="font-size: large;">For a while now I've been expecting at least a 10-14% correction to separate the second leg of this cyclical bull from what I expect will be at least one more leg up before this bull expires.</span><br />
<br />
<span style="font-size: large;">Friday's intraday low got close at -9.7%. The pattern has been for the correction between the second and third leg to be larger than the one between the first and second. We've now accomplished that goal also as the correction in July racked up a 9.5% decline.</span> <br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S3AsAc1EdPI/AAAAAAAACyM/Vsc4iKjB7BY/s1600-h/spx+correction.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S3AsAc1EdPI/AAAAAAAACyM/Vsc4iKjB7BY/s640/spx+correction.png" width="640" /></a></div><br />
<span style="font-size: large;">As you can see in `04 the correction turned into a multi month affair finally bottoming in August. This time it appears to be unfolding much faster (which is the norm by the way for bulls with our DNA).</span><br />
<br />
<span style="font-size: large;">We are still a bit short so I'm not sure this is done just yet but we're in the range of what I've been looking for. At this point I think we are probably just waiting on the dollar cycle to top. Today is the 17th day of the daily cycle which rarely runs much longer than 25 to 30 days so we are in a live area for a top in the dollar and probably a bottom in everything else. </span><br />
<br />
<span style="font-size: large;">I'll also note that we are close enough to March that this bottom should also mark a yearly cycle low. As the last two major cycle lows have occurred in March I am expecting this year to continue to follow that pattern. </span><br />
<br />
<span style="font-size: large;">I'm not really expecting this decline to make it all the way to March as sentiment is already reached bearish extremes, but I think we are close enough that we could get a slightly shortened yearly cycle bottom any time now.</span><br />
<br />
<span style="font-size: large;">I'll also add that the rallies out of yearly cycle lows tend to be extremely powerful. The average rally out of a yearly cycle bottom since 2000 has been 19% with the median being 15%. </span><br />
<br />
<span style="font-size: large;">Even if the bull has topped (which I doubt) we should expect a violent bear market rally soon.</span>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.comtag:blogger.com,1999:blog-5912441416505968748.post-36488570782153122382010-02-07T06:44:00.000-08:002010-02-07T06:47:39.939-08:00ALL CURRENCIES ARE SUSPECT<span style="font-size: large;">A comment on the blog last week got me to wondering. One of our Canadian friends made the comment that he's made nothing off of gold because the Canadian dollar has been strong. I think he was insinuating that the price of gold was only rising in the US and that only because the Fed is destroying the US dollar.</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S27NtZiSpdI/AAAAAAAACxU/yTpI2UFmypA/s1600-h/cdw.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S27NtZiSpdI/AAAAAAAACxU/yTpI2UFmypA/s640/cdw.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">After looking at the preceding chart I have to conclude our Canadian friend is simply a poor trader :-) Actually as we all know gold is a very volatile asset and pretty tough to trade successfully so his mistake was probably that he <em>was</em> trading instead of holding. Even priced in a strong (relatively speaking) Canadian dollar gold is still up 200%.</span></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">The next set of charts speak volumes about the global monetary policy.</span></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_V7Pddp58Py0/S27PCn3QmJI/AAAAAAAACxc/Hr8gWQu6l0Q/s1600-h/xeu.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://3.bp.blogspot.com/_V7Pddp58Py0/S27PCn3QmJI/AAAAAAAACxc/Hr8gWQu6l0Q/s640/xeu.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S27Pbj0zVCI/AAAAAAAACxk/yoj46G1rbvI/s1600-h/xbp.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S27Pbj0zVCI/AAAAAAAACxk/yoj46G1rbvI/s640/xbp.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S27Pk0vMzhI/AAAAAAAACxs/rT8_RNjd4TM/s1600-h/xjy.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S27Pk0vMzhI/AAAAAAAACxs/rT8_RNjd4TM/s640/xjy.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_V7Pddp58Py0/S27Py8A4_rI/AAAAAAAACx0/oD2br0_h8Gk/s1600-h/xsf.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://4.bp.blogspot.com/_V7Pddp58Py0/S27Py8A4_rI/AAAAAAAACx0/oD2br0_h8Gk/s640/xsf.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_V7Pddp58Py0/S27P3IAhXlI/AAAAAAAACx8/2XeQp2maXpU/s1600-h/xad.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://2.bp.blogspot.com/_V7Pddp58Py0/S27P3IAhXlI/AAAAAAAACx8/2XeQp2maXpU/s640/xad.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_V7Pddp58Py0/S27P6iPqm5I/AAAAAAAACyE/0CkNinH8-nw/s1600-h/nzd.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="482" kt="true" src="http://1.bp.blogspot.com/_V7Pddp58Py0/S27P6iPqm5I/AAAAAAAACyE/0CkNinH8-nw/s640/nzd.png" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Every country in the world is printing at a furious rate. No one is innocent.</span> </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><span style="font-size: large;">Recently the Australian and New Zealand central banks are showing a bit more commonsense than most, but it's certainly only a recent occurrence as gold rose 300% before backing off a bit.</span> <span style="font-size: large;">Besides who knows how long commonsense will last? Probably only until politicians start to feel the heat again.</span></div>Garyhttp://www.blogger.com/profile/14556370683669428668noreply@blogger.com