We are truly seeing history being made as the stock market moves down into its yearly cycle bottom. The last time the market was this oversold was after 9/11.
Breadth has moved to levels even more extreme than the crash of 2008.
When this bottoms, and I think it is days, if not hours away, we are going to see a rally unlike anything we have ever seen before. A rally back up to the 200 day moving average is almost a certainty. Plus the degree of stretch we are seeing right now probably even guarantees a move considerably above the 200 day moving average.
It seems like a great many folks have got it into their head that one is only allowed to make money in the precious metals market. Take a look at the long-term chart of gold though.
This has now become the steepest parabolic move of the entire secular bull market. As we found out in May, parabolic moves are prone to crashes. At this point I have no desire to be in the gold market. I could care less whether it goes to $1800, $1900, or $2000. The risk of getting caught in the crash when the parabola collapses has become too great.
I don't care where I make money. Gold, silver, or stock market, it's all the same to me. Profits are profits.
At this point I would rather put capital at risk in a severely oversold stock market than a parabolic gold market.
the two charts are very compelling Gary, and you are right that technically they should reverse. (nothing goes straight in one direction, despite the dominant trend).
my main concern with your analysis is that these are NOT typical times, and one should EXPECT extreme moves, given the dire state of things ... Bankruptcy is on a sovereign-systemic scale now, not just economic. We should expect extended extremity, and gambling on temporary pullbacks from the dominant trends is a dangerous game.
my secondary concern is sentiment; despite the charts, stock sentiment is not that super bearish yet, and the vix is not way up there yet. (I suppose this is more of a timing concern than fundamental one.)
What total nonsense. The market is crashing because the world economy is on the verge of an economic crash. There are a lot of empty seats on the Titanic but I don't consider that a buying opportunity either.
And don't forget one thing Gary. Markets can remain irrational a lot longer than you and I can remain solvent. Oversold and overbought can last for months. Let's not make a mistake about that. We can have stock market hovering at this levels without strength to bounce until it crawls out of oversold condition and then continue crashing down even further.
We are BANKRUPT and so are all the other countries but Mexico, so Bloomberg shows. This is just the beginning. I fear more trouble is coming. Corporations that moved money from foreign banks to pump up the market to make people think the market was doing good caused this crash because of fear by pulling their money out, then there was panic. Now you see bargain hunters buying. Will this last? A lot of People are living off of credit, if they still have any. If interest rates go up, there goes more banks due to homes, loans, and credit cards with people because people can't pay. London is on fire and we will be next after the UK. Gold should still be king, with ups and downs, for at least another year but if you wait to long trying to get the best price to cash in, you could loose. No doubt about it. Trouble is running gold and silver up. Well, we got lots of trouble. I still look for the dollar to go down more but it may take a year to crash. They are still spending money they don't have. How can things get better?
Sure Eri, Thanks for the concern :) I bought Statoil at 20.2 and more Total, ENI, Barrick and Petrominerales at yesterday's close. I covered my CAD short at 99.88. Still short Euro and Aussie versus the dollar. Was an awesome day.
You know Toby, I'm getting a little nervous myself about what this government might do about gold price. They do what they want to do. Everyone now going into gold because of a market that is uncertain makes me wonder, what next. It might be USE it or LOSE it. Somethings are to good to be true and just maybe this is one of them. I have no trust in what is going on anymore.
I agree with your assessment in the short term. Gold is very extended, and due for a pullback. The market got a pretty good relief rally today, and possibly more tomorrow.
Long term, I think we all know that just the opposite is true. PM's will eventually skyrocket, and the stock market will likely go nowhere, just as it's done for the past 12 years.
I completely agree that you need to be very cognizant of your where you put your money. The markets are all very volatile right now, an it takes some real skill to use intelligent analysis to make a lot of money wherever you invest.
Gary, I think you need to look outside of charts, at what is really happening in the world.
I totally disagree with your view that you should not be invested in Gold now. There isn't going to be a big crash in gold prices, due to the 10s of trillions of global fiat money printing that will occur for decades. The only way gold will crash is if there is a global reset of debt.
James, Gary has been wrong lately sticking to cycles and overbought, oversold conditions and not paying attention to events unfolding right before our eyes.
Well, at least he doesn't mention any cycles anymore. I guess he gave up on that one.
But the thing that makes me very bullish on gold is that Gary, who owns this blog called Gold Scents, started talking about getting out of gold and into equities.
When people like him stop being bullish on gold,and become consumed with wall of worry then one can only expect much higher gold prices.
Gold will be at $2,500 by the end of the year. For as long as the Western World continues printing and increasing debt there will never be a parabolic collapse in gold like there was in silver last May...I've been saying all along, theres no reason to sell gold whatsoever, just keep buying on the pullbacks. You can throw all your technical analysis out of the window when there are political and monetary policies wagging the dog.
So now that gold is priced higher than Platinum does that mean platinum is due for a run?
At a certain point in your letter I would appreciate your views on how this C-Wave compares to others. Are all the signs there for a top relative to other c-wave tops?
My concern, is that if this goes on to long(no correction), that a final run will be made for this bull...ie we need to correct soon. At some point stupid(this parabolic move imo), becomes too supid, and the bull ends.
In any regard, I think I will quit blogging for a bit, I am getting a little dizzy from the nonsense. Sorry to crowd Gold scents!
Mopped it up today with DGP, AGQ, VXX, and SKF at the open and I'm holding all 4 into tomorrow with my finger on the kill switch! Of course if theres any gold weakness I'll dump the leveraged AGQ, and DGP and add to my GLD position. I'm looooong on GLD!
ERI, I never said I was short Gold. can you show me where I said that? I was short a lot of things as we came down and long the USD quite a lot. I have lightened my USD longs and used that to buy stocks which I think will do well over the next 10 years. I am down 5% for the year, I can live with that.
Toby, I can see where a S&P rally is likely from the charts, but do you really think this was the yearly cycle low, or have we to move further lower into Oct/Nov after this rally you are predicting ? I think I remember you showed elsewhere that the major cycle bottoms in stocks occurs in March and November ? Thanks.
The yearly cycle runs about 12 months. It came in July last year so it's due. In a bear market though the yearly cycle low will get violated. So yes I expect a lower low in Nov.
Good to see Gary that you realize cycles are just another tool. Since you mention the weekly chart, perhaps you have noticed that there has not been any sell signal since you turned bearish on the markets back in October. The weekly stochastic would need to go below 80 to create a sell signal. If you have noticed, not only precious metal stocks are in a bull market. Other stocks as well have risen sharply.
Currently at 1320, I do suggest a more bearish view since all of a sudden bears give up. I do expect now a correction lasting into March
There's a world wide economic tsunami taking place and you're suggesting we all put our swim suits on and go to the beach, because your forcast predicts there may be a break in the weather. What's more is that all the fundamentals that predicted the storm are getting worse, not better. The reality is, this storm is packing a huge punch and the worst is yet to come. I suggest we avoid the beach for the forseeable future and take shelter in the mountains where gold and silver are...
Make no mistake the storm is just getting started. But I don't want to buy gold at these stretched levels. I would rather put a little money into an extremely beat up stock market for a bear market rally.
I THINK THAT GARY IS GIVING GREAT ADVICE, ESPECIALLY SHORT TERM. I DONT THINK HE IS SAYING HE ISNT BULLISH LONG TERM ON GOLD. ONE OF MY MAIN CONCERNS WITH GOLD IS THAT ALMOST EVERYONE HAS RECOGNIZED THAT IT IS A GREAT INVESTMENT. SOUNDS LIKE A GREAT TIME TO CASH OUT ON A TEMPORARY HIGH. WHEN MAINSTREAM INVESTORS ARE PUTTING OUT NEWS (JP MORGAN) REGARDING HOW HIGH IT WILL GO, SELL SELL, SELL.
I think even QE3 will not drive up this mkt. Even though many stocks are cheap, there's just too much fear out there, and no govt. aggreement on anything. Until we get Obama out, and a fiscal conservative in the white house, I don't see any hope for businesses, or investors, or housing. Since the Dems want to keep us on the same path as greece, we could end up the same. Broke, indebt, and no hope for the hopeful, or hopeless..
the two charts are very compelling Gary, and you are right that technically they should reverse. (nothing goes straight in one direction, despite the dominant trend).
ReplyDeletemy main concern with your analysis is that these are NOT typical times, and one should EXPECT extreme moves, given the dire state of things ... Bankruptcy is on a sovereign-systemic scale now, not just economic. We should expect extended extremity, and gambling on temporary pullbacks from the dominant trends is a dangerous game.
my secondary concern is sentiment; despite the charts, stock sentiment is not that super bearish yet, and the vix is not way up there yet. (I suppose this is more of a timing concern than fundamental one.)
Well Gary, you may as well change the name of your site to Stock Scents if you feel that way.LOL
ReplyDeleteWhat total nonsense. The market is crashing because the world economy is on the verge of an economic crash. There are a lot of empty seats on the Titanic but I don't consider that a buying opportunity either.
ReplyDeleteAnd don't forget one thing Gary.
ReplyDeleteMarkets can remain irrational a lot longer than you and I can remain solvent.
Oversold and overbought can last for months.
Let's not make a mistake about that.
We can have stock market hovering at this levels without strength to bounce until it crawls out of oversold condition and then continue crashing down even further.
We are BANKRUPT and so are all the other countries but Mexico, so Bloomberg shows. This is just the beginning. I fear more trouble is coming. Corporations that moved money from foreign banks to pump up the market to make people think the market was doing good caused this crash because of fear by pulling their money out, then there was panic. Now you see bargain hunters buying. Will this last?
ReplyDeleteA lot of People are living off of credit, if they still have any. If interest rates go up, there goes more banks due to homes, loans, and credit cards with people because people can't pay. London is on fire and we will be next after the UK.
Gold should still be king, with ups and downs, for at least another year but if you wait to long trying to get the best price to cash in, you could loose. No doubt about it. Trouble is running gold and silver up. Well, we got lots of trouble.
I still look for the dollar to go down more but it may take a year to crash.
They are still spending money they don't have. How can things get better?
charts work in more or less normal times, these times are quite abnormal, whole world is going nuts
ReplyDeleteI think this guy must be smarter than central bankers around the world.
ReplyDeleteBill X,
ReplyDeleteThere is no denying we have started down into a bear market.
I've been trying to warn people to get out since April.
But the market is due for a bear market rally. But that is all it will be, a countertrend rally in an ongoing bear market
USD 73.91
ReplyDeleteOh my God, that's really surprising.
Saif, are you alright?
Sure Eri,
ReplyDeleteThanks for the concern :)
I bought Statoil at 20.2 and more Total, ENI, Barrick and Petrominerales at yesterday's close.
I covered my CAD short at 99.88.
Still short Euro and Aussie versus the dollar.
Was an awesome day.
You know Toby, I'm getting a little nervous myself about what this government might do about gold price. They do what they want to do. Everyone now going into gold because of a market that is uncertain makes me wonder, what next. It might be USE it or LOSE it. Somethings are to good to be true and just maybe this is one of them. I have no trust in what is going on anymore.
ReplyDeleteTony,
ReplyDeleteI agree with your assessment in the short term. Gold is very extended, and due for a pullback. The market got a pretty good relief rally today, and possibly more tomorrow.
Long term, I think we all know that just the opposite is true. PM's will eventually skyrocket, and the stock market will likely go nowhere, just as it's done for the past 12 years.
I completely agree that you need to be very cognizant of your where you put your money. The markets are all very volatile right now, an it takes some real skill to use intelligent analysis to make a lot of money wherever you invest.
Good luck.
Why is everyone talking about gold.
ReplyDeleteWhat about silver?
Someone told me August is Gold and September is silver. Since gold has gone up this month, I'm hoping silver will be next month.
ReplyDeleteGary, I think you need to look outside of charts, at what is really happening in the world.
ReplyDeleteI totally disagree with your view that you should not be invested in Gold now. There isn't going to be a big crash in gold prices, due to the 10s of trillions of global fiat money printing that will occur for decades. The only way gold will crash is if there is a global reset of debt.
James, Gary has been wrong lately sticking to cycles and overbought, oversold conditions and not paying attention to events unfolding right before our eyes.
ReplyDeleteWell, at least he doesn't mention any cycles anymore.
I guess he gave up on that one.
But the thing that makes me very bullish on gold is that Gary, who owns this blog called Gold Scents, started talking about getting out of gold and into equities.
When people like him stop being bullish on gold,and become consumed with wall of worry then one can only expect much higher gold prices.
"I could care less whether it goes to $1800, $1900, or $2000."
ReplyDeleteWell, we got the first one out of the way, LOL
Gold will be at $2,500 by the end of the year. For as long as the Western World continues printing and increasing debt there will never be a parabolic collapse in gold like there was in silver last May...I've been saying all along, theres no reason to sell gold whatsoever, just keep buying on the pullbacks. You can throw all your technical analysis out of the window when there are political and monetary policies wagging the dog.
ReplyDeleteSo now that gold is priced higher than Platinum does that mean platinum is due for a run?
Toby,
ReplyDeleteAt a certain point in your letter I would appreciate your views on how this C-Wave compares to others. Are all the signs there for a top relative to other c-wave tops?
My concern, is that if this goes on to long(no correction), that a final run will be made for this bull...ie we need to correct soon. At some point stupid(this parabolic move imo), becomes too supid, and the bull ends.
In any regard, I think I will quit blogging for a bit, I am getting a little dizzy from the nonsense. Sorry to crowd Gold scents!
Until we speak again...Thanks Coach!
So Gary and saif, how is your long oversold equities-short overbought gold strategy working out?
ReplyDeleteI don't know exact stocks Gary is losing money in, but saif your STO is down only today 5%, Eni is down 8,49% and TOT is down 6,90%.
Oh well
Mopped it up today with DGP, AGQ, VXX, and SKF at the open and I'm holding all 4 into tomorrow with my finger on the kill switch! Of course if theres any gold weakness I'll dump the leveraged AGQ, and DGP and add to my GLD position. I'm looooong on GLD!
ReplyDeleteGold is indeed in a prabolic move, but why is that a problem? it's all about timing. Be out (or short) in time.
ReplyDeleteSilversem http//:www.goudbelegger.com
ERI,
ReplyDeleteI never said I was short Gold. can you show me where I said that?
I was short a lot of things as we came down and long the USD quite a lot. I have lightened my USD longs and used that to buy stocks which I think will do well over the next 10 years.
I am down 5% for the year, I can live with that.
Toby, I can see where a S&P rally is likely from the charts, but do you really think this was the yearly cycle low, or have we to move further lower into Oct/Nov after this rally you are predicting ? I think I remember you showed elsewhere that the major cycle bottoms in stocks occurs in March and November ? Thanks.
ReplyDeleteThe yearly cycle runs about 12 months. It came in July last year so it's due. In a bear market though the yearly cycle low will get violated. So yes I expect a lower low in Nov.
ReplyDeleteGary,
ReplyDeleteI remember early this year were you repeatedly said " you do not short the stock market" . You changed your mind ?
Gary,
ReplyDeletedo you remember my comment on 6 Feb ?
Good to see Gary that you realize cycles are just another tool. Since you mention the weekly chart, perhaps you have noticed that there has not been any sell signal since you turned bearish on the markets back in October. The weekly stochastic would need to go below 80 to create a sell signal. If you have noticed, not only precious metal stocks are in a bull market. Other stocks as well have risen sharply.
Currently at 1320, I do suggest a more bearish view since all of a sudden bears give up. I do expect now a correction lasting into March
February 7, 2011 8:57 AM
There's a world wide economic tsunami taking place and you're suggesting we all put our swim suits on and go to the beach, because your forcast predicts there may be a break in the weather. What's more is that all the fundamentals that predicted the storm are getting worse, not better. The reality is, this storm is packing a huge punch and the worst is yet to come. I suggest we avoid the beach for the forseeable future and take shelter in the mountains where gold and silver are...
ReplyDeleteMake no mistake the storm is just getting started. But I don't want to buy gold at these stretched levels. I would rather put a little money into an extremely beat up stock market for a bear market rally.
ReplyDeleteI will buy gold again once it cools off a bit.
I THINK THAT GARY IS GIVING GREAT ADVICE, ESPECIALLY SHORT TERM. I DONT THINK HE IS SAYING HE ISNT BULLISH LONG TERM ON GOLD. ONE OF MY MAIN CONCERNS WITH GOLD IS THAT ALMOST EVERYONE HAS RECOGNIZED THAT IT IS A GREAT INVESTMENT. SOUNDS LIKE A GREAT TIME TO CASH OUT ON A TEMPORARY HIGH. WHEN MAINSTREAM INVESTORS ARE PUTTING OUT NEWS (JP MORGAN) REGARDING HOW HIGH IT WILL GO, SELL SELL, SELL.
ReplyDeleteI think even QE3 will not drive up this mkt. Even though many stocks are cheap, there's just too much fear out there, and no govt. aggreement on anything. Until we get Obama out, and a fiscal conservative in the white house, I don't see any hope for businesses, or investors, or housing. Since the Dems want to keep us on the same path as greece, we could end up the same. Broke, indebt, and no hope for the hopeful, or hopeless..
ReplyDelete