tag:blogger.com,1999:blog-40310274850157311312024-03-05T23:29:27.490-06:00Guardian Angel ProtectionGuardian Angel Protection for your financial affairs.Unknownnoreply@blogger.comBlogger369125tag:blogger.com,1999:blog-4031027485015731131.post-83126798524419404202020-06-16T13:44:00.002-05:002020-06-16T13:44:51.891-05:00If You Blinked . . .<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibupKMgXyXutscT0zXTNZFmu05Py7iD9kLvoJHjkjwQnaJQgZaLr0hjrpK3A8zfNGc95kBXgt6lvrCDyAIk8Ktw4E-qoJrBo6Pjz37nTO-RXYNfHDskmNcJno2UIxad6JJwZZw6hov4DUn/s1600/tv.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="1360" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibupKMgXyXutscT0zXTNZFmu05Py7iD9kLvoJHjkjwQnaJQgZaLr0hjrpK3A8zfNGc95kBXgt6lvrCDyAIk8Ktw4E-qoJrBo6Pjz37nTO-RXYNfHDskmNcJno2UIxad6JJwZZw6hov4DUn/s400/tv.png" width="400" /></a></div>
<br />
. . . You probably missed the sell off!<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFWRnHwd_eO6xXQqZqD39yTntOf3nXJDq-COTi5EZn9Zed9ko8gb4z8OwykFTr8dtFgOPHOraKcRAp7vPh6IHfVtqXZ5ujuMi-9B31UPf_uP6U32fKefkxz1zcMBkQluwe7wHAHJhHI7XK/s1600/spx.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="645" data-original-width="1215" height="211" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFWRnHwd_eO6xXQqZqD39yTntOf3nXJDq-COTi5EZn9Zed9ko8gb4z8OwykFTr8dtFgOPHOraKcRAp7vPh6IHfVtqXZ5ujuMi-9B31UPf_uP6U32fKefkxz1zcMBkQluwe7wHAHJhHI7XK/s400/spx.png" width="400" /></a></div>
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Yes, it did go down, like interday. Had to bail quick on SDS to eke out a small gain. <br />
<br />
Another trillion to pump up the markets coming. <br />
<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-980796207726245292020-06-13T09:25:00.001-05:002020-06-13T20:59:23.248-05:00Cycles Indicate Top is In<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqiHrngMXJPyqaNQlxKhidx1k06NPCAI2yygXVedumDYvtttCv9DD1zeiQ4Mlyut4AHurN4undFJxFtncRPl4nPv1gsyeSQ696YAkTaBA1PqpikNPLmInL2BYBNhRZW1yqS2_RJRN7J5vG/s1600/SPX.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1059" data-original-width="1600" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqiHrngMXJPyqaNQlxKhidx1k06NPCAI2yygXVedumDYvtttCv9DD1zeiQ4Mlyut4AHurN4undFJxFtncRPl4nPv1gsyeSQ696YAkTaBA1PqpikNPLmInL2BYBNhRZW1yqS2_RJRN7J5vG/s400/SPX.png" width="400" /></a></div>
<br />
No need to comment on things that have been going on over the past few weeks. Craziness to the max. Suffice it to say that no indicator or past experience has been able to lend any thoughts to what can come.<br />
<br />
Despite the euphoria that saturated markets, including the tremendous bid in companies that had already declared bankrupcy, I continue to hold on to the idea that we are in a B wave of a corrective phase.<br />
<br />
June had been targeted for the three month test of the low but as it is now mid-month already, it may drag out even further into July or beyond. As others have confessed, I also am truly humbled by the magnitude and consistency of the bid in the market. I step back in awe but am truly aware that making millions in the market, that is driven solely through increasing debt and currency devaluation means absolutely nothing. While not professing to be a socialist by any means, the value of our and other currencies are truly nonexistent. When my bank account shows excess, I can't wait to get rid of it either by hiring those poor souls who worship this green paper and will sacrifice their time and energy as a way to obtaining it. How sad is it that they don't realize that governments, corporations and well-off individuals can obtain as much of it as they wish at no cost. Even to the extent that governments and banks are begging them to take more. Yet these poor souls sacrifice time away from their spouses and children, away from their friends and loved ones, to enter into servitude for something that has little true value.<br />
<br />
So I digress of course as I see the further decline in the markets to be tumultous. Even on Friday as the markets appeared to be opening down, I heard that the Treasury Secretary was vowing to add another $trillion to the market/economy or whatever/wherever this money is to go. There is desperation in the air.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM1P_DrmX0pLCiIt05STmNoAajctf3luPLmjlW8P3SeE1HIXOnAdtizIJkc3-agsATOwuJW4m7FHxwu3hdGpRYt3L23JAWUu_u0C1HUsvBL_gtVqmrHAjAll9io2qmdxbr3lmPzEaTqRlG/s1600/cycle.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1034" data-original-width="1424" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM1P_DrmX0pLCiIt05STmNoAajctf3luPLmjlW8P3SeE1HIXOnAdtizIJkc3-agsATOwuJW4m7FHxwu3hdGpRYt3L23JAWUu_u0C1HUsvBL_gtVqmrHAjAll9io2qmdxbr3lmPzEaTqRlG/s400/cycle.png" width="400" /></a></div>
<br />
My only evidence that I will put forth in my prediction in lower prices is evidence that a cycle indicator that I conjured up out of various bits of market data has turned the corner. Last week marked perhaps the top. It was a three week test of the peak and it exceeded the previous peak. That often would lead me to suggest that a top is not yet in. But there is little doubt in my decades-long work that the market is as overvalued as I had ever seen. The strength of the move has been without comparison, perhaps in my lifetime or at the very least, since I became a serious student of the market after 1988. I do follow the cycles very closely and while price does not often move in dramatic fashion as these cycles fluctuate, it is a good guide to be selling call premium instead of put premium or lighten up on bull positions and even double down with SDS, DXD, and other leveraged inverse market instruments. <br />
<br />
I have been dead wrong in my last calls for the top. Few people ever get it right. My down positions were mere pilot positions. As despair filled my soul with these ever greater moves higher, I exited everything but on Friday, again established a position in SDS. The inverse for the Russell 2000 may have been the best option as this segment of the market has shown to be the weakest. Yet even in the past weeks, it has begun to move higher with the final nail in the coffin being the sudden run up in bankrupt companies. Can anything signal a top and euphoria more than a rush into worthless bankrupt companies? Now I have seen it all, beyond imagination.<br />
<br />
<b>SILVER</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiv5IFpeO5-ncLv-xjdhwj3pFjgiO7iGwXF8huOuQ84xqRl4DOsxeYVYwFXlh2do6dRXq7oqfPgKs72u0yA4zTeqtZ8l3pOLiyLeopOLThQKm5kHzGDidKDV_JAcYABcQyZhroNU5HAFyxK/s1600/silver.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="464" data-original-width="702" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiv5IFpeO5-ncLv-xjdhwj3pFjgiO7iGwXF8huOuQ84xqRl4DOsxeYVYwFXlh2do6dRXq7oqfPgKs72u0yA4zTeqtZ8l3pOLiyLeopOLThQKm5kHzGDidKDV_JAcYABcQyZhroNU5HAFyxK/s400/silver.png" width="400" /></a></div>
While I continue to be a fan of the precious metals and continue to buy the physicals, now that they are a bit more available, albeit at prices reflecting larger premiums, the paper silver appears to be moving in line with stocks.<br />
<br />
Even though the overall pattern might have played out a bit differently, the looks are pretty much the same. With this in mind, I think that Silver also can head down in a three month test of the low. It might play out along even further into July. <br />
It is not lost on me however that if we don't have a serious move down, we may be setting up a very meaningful reverse head and shoulders formation. It is not lost on me that my predictive powers as of late have been nil. I play the paper side of metals holding long term bull spreads topping at 25. These are not traded. Also the physicals are the foundation that are also never traded or hedged. Other long calls and puts are spread off on weekly bases generating income. Also a bag of short 12 calls are on hand should we get that dramatic move down to test or exceed the lows. <br />
<br />
I'm pretty amazed at how well the metals have held up in the paper market though. Dips appear to have been bought up. That is something that few of us have experienced in a very long time. So with complacency setting in, I want to ensure that I maintain these deep in the money shorts because big silver slam downs are more of the norm than what we are seeing these past weeks.<br />
<br />
It's surely been quite a ride. Have to say that I lost a little on the stock upmove. Since 2008, I have not been a believer in stocks. But I am not distressed at all of the money I could have made. My only fear is that the money that I do maintain might have any value at all in the years to come. What is next in this world, I don't have a clue.<br />
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<br />Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4031027485015731131.post-61390551273882932392020-06-05T07:49:00.001-05:002020-06-05T07:49:08.493-05:00Everything is Back to Normal<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2q3uSJ0-OgfMai_e6M-41W8xc4pMN42LSbmQaIATCvEMjsICtwFEKNZ5HkM3TX4k4ML3b4gSSaiSHNmPXMIxj5uFO4fRLxDvY5rASVm7rVoMdCgFiF7iOZeiBLTNk7ZHo4g5dBKii6nPd/s1600/unreal.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="1360" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2q3uSJ0-OgfMai_e6M-41W8xc4pMN42LSbmQaIATCvEMjsICtwFEKNZ5HkM3TX4k4ML3b4gSSaiSHNmPXMIxj5uFO4fRLxDvY5rASVm7rVoMdCgFiF7iOZeiBLTNk7ZHo4g5dBKii6nPd/s400/unreal.png" width="400" /></a></div>
<br />
Markets soon to hit new highs. Miracles never cease. But what happens when Biden takes over?<br />
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-15921805032884007422020-06-03T08:25:00.000-05:002020-06-03T08:25:10.293-05:00Markets Continue to Celebrate Failure<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgM72DcifTsApW0kEm2Z9IDQ_lzun_fCk0En5PNu5pXC_nT03cOx2sVqoTCQaTWQXo7JSRgPXOtDf7IQ6XPjh_s2ySVHY6s9TrxgyFSEOkvB1symSDvqBIZAD9gSAAzDipCSevM2FzZcGEH/s1600/celebration.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="1360" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgM72DcifTsApW0kEm2Z9IDQ_lzun_fCk0En5PNu5pXC_nT03cOx2sVqoTCQaTWQXo7JSRgPXOtDf7IQ6XPjh_s2ySVHY6s9TrxgyFSEOkvB1symSDvqBIZAD9gSAAzDipCSevM2FzZcGEH/s400/celebration.png" width="400" /></a></div>
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<br />
At some point, one has to get the message that the markets will never go down.<br />
<br />
For me, today is that day. <br />
<br />
Don't expect to be writing anymore. What's the point?<br />
<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-77739676710912406102020-05-30T10:25:00.001-05:002020-05-31T05:59:36.589-05:00Stocks Continue Spectacular Rise From the Abyss<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO2mUnaVpYSWxRO-9R6tZLAH7xt6eIO3kQoG8xAERjDT-EF6AXgPlI2eYTYZa1L31muUj-YZJI6irh5sKAZhhDqddyjae2HWqDRkAbWFldUYO8wfkO3xqlRiCZzGNlVEB7fmzL1j7GI1z-/s1600/Market+Summary.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="380" data-original-width="1224" height="123" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjO2mUnaVpYSWxRO-9R6tZLAH7xt6eIO3kQoG8xAERjDT-EF6AXgPlI2eYTYZa1L31muUj-YZJI6irh5sKAZhhDqddyjae2HWqDRkAbWFldUYO8wfkO3xqlRiCZzGNlVEB7fmzL1j7GI1z-/s400/Market+Summary.png" width="400" /></a></div>
<br />
<br />
Stocks continued to defy gravity rising ever higher with
tech stocks even making new highs!<span style="mso-spacerun: yes;"> </span>As
the table shows, DIA, a Dow 30 ETF, rose 3.9% this week.<span style="mso-spacerun: yes;"> </span>Dollar sensitive instruments such as EFA, a
basket of foreign stocks, and SLV (silver) rose 4% or more.<span style="mso-spacerun: yes;"> </span>Bonds (TLT) and gold (GLD) eased slightly
after running up significantly for the year.<span style="mso-spacerun: yes;">
</span>TLT remains up 20.7% (not including dividends) while gold continues with
a strong year, up 14%.<br />
<br />
<br />
Silver began achieving a better relationship to gold. <br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvPRabmvzoKYq3D0N_OcrZf4qEblvVfFFM0C8ltcv_2odUOkUTz9bpgxWKY1nuSUk11G_azbF8T0aoF_7GnCur0PmUeaG90_2YCtesKJWtTPn6LNpcm2vrY2LhJLfaaiamGA21nz2lzpkk/s1600/Goldsilver.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvPRabmvzoKYq3D0N_OcrZf4qEblvVfFFM0C8ltcv_2odUOkUTz9bpgxWKY1nuSUk11G_azbF8T0aoF_7GnCur0PmUeaG90_2YCtesKJWtTPn6LNpcm2vrY2LhJLfaaiamGA21nz2lzpkk/s400/Goldsilver.png" width="400" /></a></div>
<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
From a recent high of 126.43 ounces of silver to 1 ounce of
gold, the ratio fell better than 4% this week to a more reasonable 96.846.<span style="mso-spacerun: yes;"> </span>There appears to be strong long term support
at the 81 level but many of us believe that this ratio has long been out of
alignment with reality.<span style="mso-spacerun: yes;"> </span>Current reports
from silver miners indicate that the actual ratio of silver coming out of the
ground to gold is 8:1.<span style="mso-spacerun: yes;"> </span>Historically,
through the centuries historically, silver has had a 15:1 ratio to gold.<span style="mso-spacerun: yes;"> </span>As for many centuries, silver has been used
as currency, this weighting may have been designated by things other than
mining statistics.<span style="mso-spacerun: yes;"> </span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsaMap_bvlffszR6WzYhimqzwWtQ7d0CoAM46u7h2frEGJfN7USHM0pkxAH8fmrH6A5u9KfrzCSWluS_nOqRPAaYH1IJwtkq67KuxvzwiT-_1LhKraAaRGyMmmlcAfz8GmphNQmaFsCcdz/s1600/debtclock.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsaMap_bvlffszR6WzYhimqzwWtQ7d0CoAM46u7h2frEGJfN7USHM0pkxAH8fmrH6A5u9KfrzCSWluS_nOqRPAaYH1IJwtkq67KuxvzwiT-_1LhKraAaRGyMmmlcAfz8GmphNQmaFsCcdz/s400/debtclock.png" width="400" /></a></div>
<br />
<br />
We can see on the far right, center of this graphic, with
the continued “dollar printing” carried out by the US Central Bank, a fair
value of an ounce of silver could be $3,105 an ounce.<span style="mso-spacerun: yes;"> </span>The chart shows the Dollar to Gold ratio as
$25,745<span style="mso-spacerun: yes;"> </span>The ratios provided here do
bring us to a bit over 8.<span style="mso-spacerun: yes;"> </span>$25,745/$3,105
= 8.29.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<br />
<b>Where can Stocks Go?</b><br />
<br />
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<br />
<br />
I still contend that we are in a correction phase of the
market but again, I continue to be proven wrong, just as I have been for the
last 12 years!!!<span style="mso-spacerun: yes;"> </span>I often think of how
silly it is for me to write a blog using any form of analysis other than
Federal Reserve Actions.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIaXW569FwKbLJ_l7MCrzyWB2rIlfoaPU2_rjShLnhrAgfp1IY5K1T8Tvr0rQRwHfKWTYyK6nXuwCdXe_AGvsgGa_NGG7-ydOxgqmK4Zgpy6oNolGF_ufNhkZJIJusl6jxixgM2MOsWGei/s1600/M1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIaXW569FwKbLJ_l7MCrzyWB2rIlfoaPU2_rjShLnhrAgfp1IY5K1T8Tvr0rQRwHfKWTYyK6nXuwCdXe_AGvsgGa_NGG7-ydOxgqmK4Zgpy6oNolGF_ufNhkZJIJusl6jxixgM2MOsWGei/s400/M1.png" width="400" /></a></div>
<br />
<br />
“Money Printing” is off the charts.<span style="mso-spacerun: yes;"> </span>The markets dismiss how worthless the US
dollar is so putting a price on anything is so misleading.<span style="mso-spacerun: yes;"> </span>If my stock portfolio is worth $1 million
dollars, it might as well be $1 million in Monopoly money.<span style="mso-spacerun: yes;"> </span>It is insignificant.<span style="mso-spacerun: yes;"> </span>When one looks at a value of the stock market
in terms of this money printing, we can see that even as the markets rise
trying to maintain some sense of real value, stocks still fall short.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_5G4lXXcoUp0NvqdloPBWHx8unBHRJv1eIIg7dIymeEV-L3xAWw2NGeJXjVLq8nieQWgC4scM5l1L2pwjWJAFidT5w2wGGuUTWhyQlG8f8sPWnyyTF8eWOIzm9e5eV02mEPI8jTlMHHAr/s1600/SPXM1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_5G4lXXcoUp0NvqdloPBWHx8unBHRJv1eIIg7dIymeEV-L3xAWw2NGeJXjVLq8nieQWgC4scM5l1L2pwjWJAFidT5w2wGGuUTWhyQlG8f8sPWnyyTF8eWOIzm9e5eV02mEPI8jTlMHHAr/s400/SPXM1.png" width="400" /></a></div>
<br />
<br />
In light of this view, it appears that being invested in
stocks is better than not.<br />
<br />
<br />
<br />
Back to the market interpretation.<span style="mso-spacerun: yes;"> </span>I had early on suggested that a correction
can often be in a zig-zag shape.<span style="mso-spacerun: yes;"> </span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVRJNGhqQb9rXmy_D_OZm7f8AHHswI_1FTSPZ0poGCUceDj6WV0k18yjfBfwAwSRYOOvPYyNufb84MESMVxL-zBJE9MwsKWEtvtfirTK4U8WsjuATQhcySdF-IRGC3YxJNQ8bTFxDC9mQG/s1600/correction.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="360" data-original-width="480" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVRJNGhqQb9rXmy_D_OZm7f8AHHswI_1FTSPZ0poGCUceDj6WV0k18yjfBfwAwSRYOOvPYyNufb84MESMVxL-zBJE9MwsKWEtvtfirTK4U8WsjuATQhcySdF-IRGC3YxJNQ8bTFxDC9mQG/s400/correction.jpg" width="400" /></a></div>
<br />
<br />
We can see two types of corrections here, a flat and a zig –zag.<span style="mso-spacerun: yes;"> </span>A flat correction could even reach the start
of the down move, which was the market highs.<span style="mso-spacerun: yes;">
</span><br />
<br />
<br />
<span style="font-family: "calibri" , sans-serif; font-size: 11.0pt;">I suggested this possibility <a href="https://www.tradingview.com/chart/SPX/zNBwBPzn-SPX-A-test-of-the-highs-as-a-possibility/" target="_blank">https://www.tradingview.com/chart/SPX/zNBwBPzn-SPX-A-test-of-the-highs-as-a-possibility/ </a></span><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
on April 17<sup>th</sup>. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>One
viewer’s comment on this was:<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><br />
<br />
<span style="background: white; color: #131722; font-family: "trebuchet ms" , sans-serif; font-size: 10.5pt;">Lol .. I think this chart is insane .. no jobs
... no rent payments .. and stock higher ? This is euphoria phase .. big boys
soon gonna bail out on $1200 checks</span><br />
<br />
<br />
<br />
<span style="background: white; color: #131722; font-family: "trebuchet ms" , sans-serif; font-size: 10.5pt;">It’s usually when I get abused by outlandish
calls, although within the realm of possibilities, I believe that I am on to
something.</span><br />
<br />
<br />
<span style="font-family: "calibri" , sans-serif; font-size: 11.0pt;">One thing for sure, get out of the way when the
Fed and other central banks are lavishly dumping money into the financial
sector.<span style="mso-spacerun: yes;"> </span>You can be sure that it is not
going into your pocket, but Mr. Market’s.</span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<b>Focusing on the Dollar</b><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-uRtzjIsqXaelo8EXjK2YJVB6DmvAjJo942VYdZ-iG14IcAGRPZnRT0itIT4oQtkSlFLtlhp5am9zgbXH_Roo4ZdfsEhyphenhyphenNTxi8MoOG3zWA2o84hk8QvnS108BFpD3Vs5b82bO7Ksxov26/s1600/UDN+weekly.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
<div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-uRtzjIsqXaelo8EXjK2YJVB6DmvAjJo942VYdZ-iG14IcAGRPZnRT0itIT4oQtkSlFLtlhp5am9zgbXH_Roo4ZdfsEhyphenhyphenNTxi8MoOG3zWA2o84hk8QvnS108BFpD3Vs5b82bO7Ksxov26/s1600/UDN+weekly.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-uRtzjIsqXaelo8EXjK2YJVB6DmvAjJo942VYdZ-iG14IcAGRPZnRT0itIT4oQtkSlFLtlhp5am9zgbXH_Roo4ZdfsEhyphenhyphenNTxi8MoOG3zWA2o84hk8QvnS108BFpD3Vs5b82bO7Ksxov26/s400/UDN+weekly.png" width="400" /></a></div>
<div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-uRtzjIsqXaelo8EXjK2YJVB6DmvAjJo942VYdZ-iG14IcAGRPZnRT0itIT4oQtkSlFLtlhp5am9zgbXH_Roo4ZdfsEhyphenhyphenNTxi8MoOG3zWA2o84hk8QvnS108BFpD3Vs5b82bO7Ksxov26/s1600/UDN+weekly.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><br /></a></div>
<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
One has to think as the Federal Reserve increases the money
supply, the value of the dollar needs to decrease.<span style="mso-spacerun: yes;"> </span>This is simple logic as the value of the
dollar is supported solely by the government’s tax base and it’s ability to pay
interest on its debt.<span style="mso-spacerun: yes;"> </span>With interest
rates down so low, perhaps the “strong” dollar can continue to be
supported.<span style="mso-spacerun: yes;"> </span>This instrument above UDN is
a way to play or view the dollar going down.<span style="mso-spacerun: yes;">
</span>We can see that UDN increased 1.6% this week but remains down 2.2% on
the year, reflecting the US Dollar’s strength against other foreign
currencies.<span style="mso-spacerun: yes;"> </span>It appears to be reaching
resisting just overhead at the green line (50 week Exponential Moving
Average).<span style="mso-spacerun: yes;"> </span><br />
<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<b>Silver</b><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEsce6OKSurk-MXL_NnFVBNcjbqYl01vOYSm1nXG-Ed8l0KXZdK8r2MxRMJhL0kkPJDLoSxbRb3y0ekgm0JdO-UzIm1WPJZiRPqKp6aa_GH70JF0nyi2ns58EqFOTZZSpxkOXopkkBjnIc/s1600/slv.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEsce6OKSurk-MXL_NnFVBNcjbqYl01vOYSm1nXG-Ed8l0KXZdK8r2MxRMJhL0kkPJDLoSxbRb3y0ekgm0JdO-UzIm1WPJZiRPqKp6aa_GH70JF0nyi2ns58EqFOTZZSpxkOXopkkBjnIc/s400/slv.png" width="400" /></a></div>
<br />
I continue to like Silver at the moment although it is
reaching it’s high level.<span style="mso-spacerun: yes;"> </span>In this view,
we can see a clearly formed down trend.<span style="mso-spacerun: yes;">
</span>Just as stocks have shown an A-B-C correction format, silver also
appears to be in a B wave correction mode and can possibly fall back to lower
lows.<br />
<br />
<br />
<br />
Another view of silver that I had contemplated recently is
this:<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr2hAYhz5jzgx-f3cRhxbTkz6M8p67Z5PL7dkBlsgmKJ8OEO7hSVratc8YK60zbAbuwcd97whVs_FT_L-AaedpnZCdUbmjF8CZW_lHsFTADKesabJJQhIZE3pT2QW743uyCG9C7rjsilbv/s1600/slv+reverse+hs.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr2hAYhz5jzgx-f3cRhxbTkz6M8p67Z5PL7dkBlsgmKJ8OEO7hSVratc8YK60zbAbuwcd97whVs_FT_L-AaedpnZCdUbmjF8CZW_lHsFTADKesabJJQhIZE3pT2QW743uyCG9C7rjsilbv/s400/slv+reverse+hs.png" width="400" /></a></div>
<br />
<br />
Both scenarios are on the radar and I will be watchful
of.<span style="mso-spacerun: yes;"> </span><br />
<br />
<br />
<br />
<b>My Strategies</b><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><br />
<br />
Especially with Precious Metals, it appears to be prudent to
buy physicals such as gold and silver bullion or American Eagle coins and keep
them secure in your elements, not at a bank safe deposit vault.<span style="mso-spacerun: yes;"> </span>The real value of holding these are in some
event affecting the banking system, if you are unable to access cash machines,
sudden collapse of the dollar (with ever increasing tensions with China,
Russia, Iran, Saudi Arabia, ...), or some other event that is only foreseen in
prophesy, stuff can happen and as we have seen recently with the restrictions
of our freedoms, holding a physical that might hold value and be used in
exchange for goods and services is important.<span style="mso-spacerun: yes;">
</span>While a word of caution needs to be injected here, it had been illegal
to hold gold three times in our history:<span style="mso-spacerun: yes;">
</span>1919, 1933 and as recently as 1973.<span style="mso-spacerun: yes;">
</span>As there is to any risk of our properties in this day and age, our
precious metals, held within our borders, governments can and have confiscated
our property.<span style="mso-spacerun: yes;"> </span>But it’s your best bet for
being diversified.<br />
<br />
<br />
<br />
And buying physical gold and silver is much like buying real
estate.<span style="mso-spacerun: yes;"> </span>The spreads between the buy and
sell price are much wider than in the paper trading markets so any impulse to
trade it in small quantities does not make sense.<span style="mso-spacerun: yes;"> </span>The big banks hold massive quantities of
precious metals but sell options, futures and other instruments in the paper
market to leverage their holdings.<span style="mso-spacerun: yes;"> </span>I
tend to do the same thing.<span style="mso-spacerun: yes;"> </span>I hold
physicals and long term SLV options.<span style="mso-spacerun: yes;"> </span>I
often sell options against my ETFs to generate regular income.<span style="mso-spacerun: yes;"> </span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
In stocks, I currently hold very small positions for the SPX
and QQQ (tech index) to go down.<span style="mso-spacerun: yes;"> </span>I have
been dead wrong this far in both as markets have risen higher and higher.<span style="mso-spacerun: yes;"> </span>I have resisted impulses to buy more down
positions (SDS, two times down for the S&P, and QID, two times down for
QQQ).<span style="mso-spacerun: yes;"> </span>I am looking to buy next TWM, two
times down for IWD that is an ETF for the Russell 2000, a broad base stock
index.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFOrjh0h__vIlIX4EcsWI80jT8a2hlV3vsN0EGH_QER68AmzrtoLnvDF1ptLNSM2CoSF62UYJKXaXbWu1Uvk7tMaH1QVYtXBgwdREbN1oH07sqGJHckdVNv2QBfTL1lgdso4zOZSnO4hAs/s1600/US+Stocks.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="669" data-original-width="1600" height="166" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFOrjh0h__vIlIX4EcsWI80jT8a2hlV3vsN0EGH_QER68AmzrtoLnvDF1ptLNSM2CoSF62UYJKXaXbWu1Uvk7tMaH1QVYtXBgwdREbN1oH07sqGJHckdVNv2QBfTL1lgdso4zOZSnO4hAs/s400/US+Stocks.png" width="400" /></a></div>
<br />
We can see that the smaller companies, as reflected in the
Mid-Cap. Russell 2000 and micro cap segments, the worst the annual
performance.<span style="mso-spacerun: yes;"> </span>I would expect that the IWM
would begin to start off the market decline so will look to enter into a down
position for this instrument.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHP8Uzs8CHCbcLJTW5ObSwamparbgk_T9hdOQFyaOhuY90h7TxPSzzBlwo3PJiRkHs41h-8HA9ytgFsVSE1kKC92BrzEyQGkkLt0zjwpnSokICqEAEwOKwjmp7W1sAOqAdM58PzbO_XVQb/s1600/IWM.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHP8Uzs8CHCbcLJTW5ObSwamparbgk_T9hdOQFyaOhuY90h7TxPSzzBlwo3PJiRkHs41h-8HA9ytgFsVSE1kKC92BrzEyQGkkLt0zjwpnSokICqEAEwOKwjmp7W1sAOqAdM58PzbO_XVQb/s400/IWM.png" width="400" /></a></div>
<br />
<br />
In the weekly chart of IWM, we can see that it was repulsed
at the .618 Fibonacci retracement level.<span style="mso-spacerun: yes;">
</span>Many expected this to happen with SPX (large cap stocks) but this has
not happened.<span style="mso-spacerun: yes;"> </span>The Russell 2000 is the weakest
of the SP 500, QQQ (tech sector that is challenging its highs) and mid cap.<br />
<br />
<br />
<br />
For grins, here is QQQ for comparison:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcVyof4X6J_JYKlWOSEmU695dCIOZ9q8zilhD2_xoVmFbMqPnlbmTlsvJ_8qNnFqzrZduslR_EH12grA7FiRM8VmqVViMfk_ww26k7kUzQjOswzZWu03nKYz3UCfPbjzr2USf_mi-KgdIN/s1600/qqq.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcVyof4X6J_JYKlWOSEmU695dCIOZ9q8zilhD2_xoVmFbMqPnlbmTlsvJ_8qNnFqzrZduslR_EH12grA7FiRM8VmqVViMfk_ww26k7kUzQjOswzZWu03nKYz3UCfPbjzr2USf_mi-KgdIN/s400/qqq.png" width="400" /></a></div>
<br />
<span style="font-family: "calibri" , sans-serif; font-size: 11.0pt;"><b>FINAL NOTE
- 3 Month Test of the Lows</b></span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3d14qE23INdbREv3scKCWNJTeTh96OYY_vhprblhzpyupXcohtTBlfaNeGdnZVAxtaS_4i9SSKdPvVmaO4SpdUsIDUAdjIkRvWEMpqDl7iQMIIp8bJaO0v9sAU4LuP7flIEFoE_qiMRmh/s1600/final+note.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1071" data-original-width="1600" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3d14qE23INdbREv3scKCWNJTeTh96OYY_vhprblhzpyupXcohtTBlfaNeGdnZVAxtaS_4i9SSKdPvVmaO4SpdUsIDUAdjIkRvWEMpqDl7iQMIIp8bJaO0v9sAU4LuP7flIEFoE_qiMRmh/s400/final+note.png" width="400" /></a></div>
<br />
<br />
I often like to look for tests of highs and lows.<span style="mso-spacerun: yes;"> </span>Regular periods of these tests are three,
sometimes four periods.<span style="mso-spacerun: yes;"> </span>On a monthly
view, we see that we are at four months up, trying to take out the highs.<span style="mso-spacerun: yes;"> </span>On QQQ we tried hard over the past few days
to rally above but failed.<span style="mso-spacerun: yes;"> </span>SPX above is
still well below the highs.<span style="mso-spacerun: yes;"> </span>We might
expect things to turn and now go down for a three month test of the lows,
possibly four.<span style="mso-spacerun: yes;"> </span>With this next potential
move down, we can see what kind of correction plays out.<span style="mso-spacerun: yes;"> </span>Is it a Flat? Or a Zig Zag?<span style="mso-spacerun: yes;"> </span>In SPX, it would form a zig zag implying even
lower prices on the way down.<br />
<br />
<br />
<br />
If we ever start moving down, I will comment more.<span style="mso-spacerun: yes;"> </span>Unfortunately, any move down has been met
with fierce Federal Reserve stimulus and Government interventions.<span style="mso-spacerun: yes;"> </span>They cannot allow the markets to go down nor
can they allow corporations to default on debt.<span style="mso-spacerun: yes;">
</span>The consequences would make you very glad that you have physical gold
and silver on hand.<br />
<br />
<br />
<br />
Thanks for your attention.<br />
<br />
<br />
Gary<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-15499941169652407042020-04-28T07:09:00.000-05:002020-04-28T19:35:37.991-05:00Market Does Fine, Without Jobs, Without Economic Activity<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQwu8syWIr3_A8plMSc4Qp-8KrHpVYM-a-RE8NYyYiUHq1O1CHCMc9Jzp7MKHCloM5pdOdWgOJjtmmH1IK1hKKsNafGWE8FfLWWL0YEWYAGAFw6NBlk83PeqdyO2zlA7EywrxqjNgNPgTV/s1600/SPX.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="645" data-original-width="1181" height="217" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQwu8syWIr3_A8plMSc4Qp-8KrHpVYM-a-RE8NYyYiUHq1O1CHCMc9Jzp7MKHCloM5pdOdWgOJjtmmH1IK1hKKsNafGWE8FfLWWL0YEWYAGAFw6NBlk83PeqdyO2zlA7EywrxqjNgNPgTV/s400/SPX.png" width="400" /></a></div>
<br />
Markets continue to soar. Nothing is going down, with the exception of oil.<br />
<br />
Stocks, bonds, precious metals all are maintaining strong levels despite the fact that more than 26 million people have lost their jobs in the past month. <br />
<br />
But this is my last call for a sell as we move to the .618 Fib level. Experts contend that moving above that level can signify a trend change. Once again, I will have been wrong about this market, just as I have been wrong about the market since 2009. In the end, it doesn't matter, does it? In reality, your assets are worthless!<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgV2yU-cWJvj6OmfAH8XPDiRLa0b8uCO6ilOChDpF6_eCFRY1HF5xYo5X9gIxaN_bxHjRAtTxFLA9VWo9NCKB8UXAOFTPq0uvTXvhTB3S7R58ql3Vfed_-1DJJOq8pQCMv9ZyMjiRpLq3kF/s1600/M1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="645" data-original-width="1181" height="217" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgV2yU-cWJvj6OmfAH8XPDiRLa0b8uCO6ilOChDpF6_eCFRY1HF5xYo5X9gIxaN_bxHjRAtTxFLA9VWo9NCKB8UXAOFTPq0uvTXvhTB3S7R58ql3Vfed_-1DJJOq8pQCMv9ZyMjiRpLq3kF/s400/M1.png" width="400" /></a></div>
<br />
This chart exhibits the level of the M1 money supply. We can see that since 2009, the money supply has more than tripled. Has your salary? Not likely. Unless you control the means of production, which seems to be shifting more and more to the hands of the government and government cronies, we are all in the same boat. Any wealth that you believe you might have is an illusion. <br />
<br />
The fact that the Federal Reserve has been printing unlimited amounts of money now cannot be denied. Yet the effects of inflation have yet to be seen in obvious ways like in Venezuela. But while we are blinded by the reality, that is the inevitable outcome.<br />
<br />
Seems that any market analysis is pure folly. There are no markets anymore. <br />
<br />
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Here is the cost of money, very close to $0. Soon, like oil, holders of money will have to pay others to take their money! Hey, that's what is already happening in Europe! <br />
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<b>MONTH ENDS ON THURSDAY</b><br />
<b></b><br />
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As I discussed in last weekend's writing, we are doing a three month test of the highs, more pronounced in the QQQ instrument that is a proxy for the Nasdaq and tech stocks in general. In premarket this morning, we are at 217 so a mere 2 points away from the monthly closing high.<br />
<br />
The next couple of days will be interesting. In the end though, whether you win or lose, the money you win or lose is quite worthless.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-45008294061519977762020-04-25T10:16:00.003-05:002020-04-26T11:24:02.488-05:00Stocks Lose Steam, Latin America Battered<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFI-hnzijRogYTfNWd40FIPbUPn27lKmWJpJBKKH2RrKCiMBRun21HE-txqHxTgQSbue3MuE5Dc4PCWIBp5d8BBvcGGmp-rPZR4NRR5OOIDUWf_XHGL1Af6OkHYIP7_UVFcBNEVqE-4g4I/s1600/spx+opening.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1082" data-original-width="1600" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFI-hnzijRogYTfNWd40FIPbUPn27lKmWJpJBKKH2RrKCiMBRun21HE-txqHxTgQSbue3MuE5Dc4PCWIBp5d8BBvcGGmp-rPZR4NRR5OOIDUWf_XHGL1Af6OkHYIP7_UVFcBNEVqE-4g4I/s400/spx+opening.png" width="400" /></a></div>
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Stocks took a breather this week despite continued monetary stimulation from central banks across the globe.<br />
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Gold continued to shine, up over 2% on the week. Bonds, represented by TLT also did well. On the year, TLT is up 26%, outpacing Gold by 2X.<br />
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Decliners outpaced Advancing issues in my work Adv 55 - Dec 111. Last week, it was 50/50 and the prior week, there were only 3 decliners. While the averages are holding higher, the vast majority of stocks are reflecting more of the reality. No one can possibly predict what is to come next. <br />
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<b>Latin America Pains</b><br />
<b></b><br />
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Looking across the Americas, Latin America was hard hit, led by political turmoil in Brasil along with oil woes faced by Mexico.<br />
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Latin American investors are looking at market valuations not seen in decades.<br />
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<br />
<b>US Sectors</b><br />
<b></b><br />
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Not much was working in terms of broad based sectors. But quite a few stocks were doing very well.<br />
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As mentioned last week, Wheaton Precious Metals and Franco Nevada shares continued making new highs.<br />
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<br />
I continue to like and look for more opportunities to buy more should any sell-offs hit. There is little doubt that even while the market prices of gold and silver continue to disappoint, these shares are getting noticed by buyers. I have yet to hear anything though on the main stream market channels. Once the mainstream catches on, the potential for considerably higher prices will be released.<br />
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<b>Shining Stars</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7cDA6RSRJbW7zueuZdiLu25h5DCpcxPH7Lo4iv-4YART-b7Y2j08TPTh2skkWzj9ebfPO-MZ-dvO1bufEcRwfRNDXylWwaj4oJQsv756-sNtzNpbdpemAtWU4R7FLO0eunX6x7rFr_Pwb/s1600/stocks.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="927" data-original-width="1600" height="231" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7cDA6RSRJbW7zueuZdiLu25h5DCpcxPH7Lo4iv-4YART-b7Y2j08TPTh2skkWzj9ebfPO-MZ-dvO1bufEcRwfRNDXylWwaj4oJQsv756-sNtzNpbdpemAtWU4R7FLO0eunX6x7rFr_Pwb/s400/stocks.png" width="400" /></a></div>
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Healthcare, technology and services led the way but keep in mind that even in these sectors, most stock charts looked lackluster or hitting resistance.<br />
<br />
Some of the shares I'd like to display<br />
<br />
<b>Scotts Miracle Grow</b><br />
<b>Basic Materials</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl7Imgvu8h8LHMDbvfVC7mhZqZRC6OizVdwNYnq3sBJKincv9nMbvTsS4iDrnpG3-DtstU_7a2JXVcnOKmtrNTsPjhHqQ_S4i_yNr3r2g3F05T_o4bsHjr8_rky5xnV77_DWBWKlBQJkQE/s1600/SMG.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1082" data-original-width="1600" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl7Imgvu8h8LHMDbvfVC7mhZqZRC6OizVdwNYnq3sBJKincv9nMbvTsS4iDrnpG3-DtstU_7a2JXVcnOKmtrNTsPjhHqQ_S4i_yNr3r2g3F05T_o4bsHjr8_rky5xnV77_DWBWKlBQJkQE/s400/SMG.png" width="400" /></a></div>
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Momentum strong, looking as it might take out the highs. Maybe it's waiting for Michigan seed sales to begin again.<br />
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<b>Pool Corp</b><br />
<b>Consumer Products</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJPK9nJYDh7esDBh10wvHbWqITXF9nEPz12zX3bfwMTP6udUj6iFFmHteeK9_3ClegIGdpttfIIIzkjivbgE2utgtVqDuN9_meehRQc5kKPNJuYRfz4id1LMqSJvJBz6ga87Wfg5duvHQI/s1600/pool.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1082" data-original-width="1600" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJPK9nJYDh7esDBh10wvHbWqITXF9nEPz12zX3bfwMTP6udUj6iFFmHteeK9_3ClegIGdpttfIIIzkjivbgE2utgtVqDuN9_meehRQc5kKPNJuYRfz4id1LMqSJvJBz6ga87Wfg5duvHQI/s400/pool.png" width="400" /></a></div>
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Picking up steam here. Maybe if you can't go to the beach, you need to put in a home pool? <br />
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<br />
<b>Johnson and Johnson</b><br />
<b>Healthcare</b><br />
<b></b><br />
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<br />
Healthcare stocks continue to make headlines for a multitude of reasons as corporations race to supply health care works, produce easy to use virus tests, and create vaccines. Seems that in every event there are winners and losers if you are alert.<br />
<br />
<b>Cerner Corp</b><br />
<b>Technology</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXGkDAcsDlol9rfSA_YGvsgTBOUMpoqf0iuHkSRLszddw_fOV_hUuz5UVZWro-EEXBZ14uEWXuYqum9HhlLFxx1HjoTmyFyqwDWsEr2y-JGzyzkkrW7po09tNY4Z2lv5bozUaG57xXviLM/s1600/cern.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1082" data-original-width="1600" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXGkDAcsDlol9rfSA_YGvsgTBOUMpoqf0iuHkSRLszddw_fOV_hUuz5UVZWro-EEXBZ14uEWXuYqum9HhlLFxx1HjoTmyFyqwDWsEr2y-JGzyzkkrW7po09tNY4Z2lv5bozUaG57xXviLM/s400/cern.png" width="400" /></a></div>
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Quite a number of stocks in this sector that looked good. I chose this one to illustrate as it appeared to have good momentum for hitting the highs. Otherwise, technology overall appears to be highly valued so if you are a value investor, which probably no one is anymore, finding true value is pretty difficult<br />
<br />
<br />
<b>Other Areas</b><br />
<b></b><br />
There was nothing that looked good in the Industrial, Finance and Utility sectors.<br />
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<br />
<b>What's Coming Next?</b><br />
<b></b><br />
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<br />
Those that have followed me over the years know that I look at 3-period tests of highs and lows to help confirm buy and sell signals. Over the past 12 years, few sell signals manifested as stocks were in an ever ascending mode. Terms such as the "Fed Put" always emerged as stocks continued to dazzle the trend followers.<br />
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We can see in this chart of QQQ, a proxy for the Tech sector, we are very close to the three month test of the high. Thursday marks April 30 so next week's report will confirm if stocks are to continue rallying or if a tentative sell is issued. I find it so interesting when I can watch the market closes around tests of highs and lows. It's a real concept. You can see the battle often raging between buyers and sellers at the critical closing price.<br />
<br />
One thing that I am cautious about though is that while the January closing price is the highest closing price, prices did go higher in February but then closed lower. So it's still possible that even if April's closing price was below January's, prices can still go higher in May, testing the ultimate top.<br />
<br />
As the QQQ monthly close is but a few points away from January's close, it will be most interesting to see what happens here. Tech has been the strongest sector by far.<br />
<br />
<b>S&P 500 Monthly</b><br />
<b></b><br />
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<br />
The S&P 500 chart is far below January's close so a massive move can be anticipated. Crazy as it sounds, this is the formation set-up so I'd be cautious about shorting as we anticipate an unfathomable test of the high.<br />
<br />
Let's see what happens.<br />
<br />
One key dynamic to watch is how much money central banks will be continuing to throw into the economies. At some point though, the reality of what continued money creation will hit home. What actually backs currencies? Is it merely backed by the tax base? the government's ability to service debt? With interest rates close to 0% and actually negative in other places in the world, Debt servicing may not be such an issue, especially if you are a country that can create more currency to pay that interest.<br />
<br />
So many claim that there is no inflation. Can you really believe that? Highly educated economists actually say this, inflation is low or there is little chance of inflation. I can only guess that these individuals earn so much money that the incremental shifts in prices are not noticed.<br />
<br />
Last year, I was able to buy grapes for $0.99/lb. I have not seen them under $1.99 this year. Same with other produce that I regularly buy. Apples were $0.49 and now if you can get them for under $1, you've got to stock up. Plant-based milk was going for $2.29 to 2,49. At best I'm lucky if I can find 2 for $7 and many places it is up to $4.49.<br />
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I don't know if you've looked at home prices. I have started looking as I am anticipating that real estate will take a nose dive if the pandemic situation does not get resolved quickly. I'll see a home that is tiny, perhaps a 2 bedroom one bath at most. Basic basic. I would think $125K tops? Nope, try close to $300K. This is insanity and fueled by all of the monetary stimulus to Federal Reserve has been injecting into the system. Yes the asset prices go up because the money is there and it has to be invested less it total devalue into nothingness.<br />
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<b></b><br />
<b>What Effect Money Printing?</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXQV_ehY_RB2osj34skniS_k2OGk-OBiXiq7vRxY-uxeM-b2L9qY046GZ8n4VAztnVU_dJum2m6RsF9WltYsKiiJSU_I84Yx-e0e7Hc_vPrgMmDszyfAroacdrwQsXtOm-QcUiXGrt9b4s/s1600/Mi+spx.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1082" data-original-width="1600" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXQV_ehY_RB2osj34skniS_k2OGk-OBiXiq7vRxY-uxeM-b2L9qY046GZ8n4VAztnVU_dJum2m6RsF9WltYsKiiJSU_I84Yx-e0e7Hc_vPrgMmDszyfAroacdrwQsXtOm-QcUiXGrt9b4s/s400/Mi+spx.png" width="400" /></a></div>
<br />
If we look at the value of the S&P 500 and take into consideration the amount of currency, as measured by M1, we can see that stocks have been going down ever since their peak in 2000<br />
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How sad it is that in reality, we are getting trashed. <br />
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I often am thinking, what can I do with the money? Where can you invest it? Is there any way that one can stay afloat?<br />
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<b></b><br />
<b>USDEBTCLOCK.ORG</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiD_PF0TRbSx-kODeopyCTsiFN6yg3p9hJubk6gZQXcuSCjU3GqukC9PIzoO_Dn-Qgs9jTZGg6Rcic-B_MBnTB3xch_b3qlN-aa4l9atA_DhoIKPAvtfqjeZarDtc-qcy2q_d4AdCfddMKx/s1600/debtclock.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiD_PF0TRbSx-kODeopyCTsiFN6yg3p9hJubk6gZQXcuSCjU3GqukC9PIzoO_Dn-Qgs9jTZGg6Rcic-B_MBnTB3xch_b3qlN-aa4l9atA_DhoIKPAvtfqjeZarDtc-qcy2q_d4AdCfddMKx/s400/debtclock.png" width="400" /></a></div>
<br />
Is this reality?<br />
<br />
Silver at $2,455an ounce?<br />
Gold at $20.351 an ounce?<br />
<br />
Why are prices so depressed?<br />
<br />
There are 173 times the amount of physical silver in the silver "paper" market. 88 times in the gold market.<br />
<br />
Someday, perhaps not in my lifetime, there will be reality. Don't really see buying stocks as part of my reality, other than the gold/silver stocks that I had mentioned.<br />
<br />
Looking for the tests of the monthly highs this week. a clear failure, especially in QQQ may spur me on to buy some SDS or SPXS. Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-66382305323551741672020-04-18T09:26:00.002-05:002020-04-18T09:26:52.674-05:00<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjElctIe81GE-n8pudGM30VtpzJ8xCZpVh_nlNdXcP6kWFRLvs_xv4IgAU9hTKHZEYfE3oaDOS1sVVm_HKKB8NC8G18jndCV_vivUsnPw3U6mMqE1s3D5AgYpzRkV5_2lnx7BKSkLg6uEs4/s1600/SPX+1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1117" data-original-width="1600" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjElctIe81GE-n8pudGM30VtpzJ8xCZpVh_nlNdXcP6kWFRLvs_xv4IgAU9hTKHZEYfE3oaDOS1sVVm_HKKB8NC8G18jndCV_vivUsnPw3U6mMqE1s3D5AgYpzRkV5_2lnx7BKSkLg6uEs4/s400/SPX+1.png" width="400" /></a></div>
<br />
Standard and Poors 500 index continued its rally, advancing some 3% to 2874.56, up almost 85 points on the week.<br />
<br />
The advance/decline line went to neutral in my stock universe with 84 advances against 82 decliners. Last week there were only 3 decliners.<br />
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Markets were led by the usual suspects, FANG stocks. Netflix and Amazon made new highs. AMD also showed good gains.<br />
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<br />
When sorted by 10-week gains, I was surprised to see Wheaton Precious Metals leading the lot with a 20% move. WPM has been one of my core holdings as I focus on precious metals and gold and silver stocks.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhz9ZYieVgrR7HCyyQZlG8hKpJyT3rXzDYV9tid7ApxvduVL5kB5veTu7rE-HMrziJ0k2aryKhHTmBhoWfKUN9l7uaF5APEjgGTGOc3mW6RSAzqRJjbNbgR5gvjmZq0xcebIc8hDmSNrpMD/s1600/WPM.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1118" data-original-width="1600" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhz9ZYieVgrR7HCyyQZlG8hKpJyT3rXzDYV9tid7ApxvduVL5kB5veTu7rE-HMrziJ0k2aryKhHTmBhoWfKUN9l7uaF5APEjgGTGOc3mW6RSAzqRJjbNbgR5gvjmZq0xcebIc8hDmSNrpMD/s400/WPM.png" width="400" /></a></div>
<br />
Wheaton is a gold and silver streamer. Basically, it's a middle man that buys from the mines and sells to users. It wasn't too long ago that the prices of both Wheaton and SLV (silver ETF) were the same.<br />
<br />
Wheaton's price has doubled since then as SLV has declined some 10-20% from those levels. <br />
<br />
I also like Franco Nevada FNV<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhG_ddQ33DVeZyMW0wYk7ZSUaPz89elEiY3OIj9CtFypdLB2qJnYk-r9PmaEF-YK5eLSwKy9Gj1RoQuaFdQF98-Y612EY0BIISsoGXRc12k2tImsbOdS9jkaBSaAIJHDOnDWlqP_B9QztN8/s1600/FNV.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1118" data-original-width="1600" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhG_ddQ33DVeZyMW0wYk7ZSUaPz89elEiY3OIj9CtFypdLB2qJnYk-r9PmaEF-YK5eLSwKy9Gj1RoQuaFdQF98-Y612EY0BIISsoGXRc12k2tImsbOdS9jkaBSaAIJHDOnDWlqP_B9QztN8/s400/FNV.png" width="400" /></a></div>
<br />
Had been hoping for it to drop in price to buy more but like stocks in general, prices have continued to rise. Notice how these precious metals stocks are making new highs along with only a few of the leading tech stocks. <br />
<br />
While I continue to look for some pull back in the precious metals sector, it as it is highly correlated with the movement in stocks in general, it has not provided a hedge to the overall stock market as one would expect in this sector.<br />
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<br />
<b>Market Possibilities</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnWykOxqjeG0o1y7CJGGP40OI0cFJfpne2drnodu_5CUShAZ4Ekfp9fadW3nIpS_LjyofsvUMeJ_i3Y41rJr1-ws0N9F4bqkLxl38XQ7brYqVUZhzAAMws-Xvud13FIwt4jZ-U0wXA8njM/s1600/spx.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1117" data-original-width="1600" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnWykOxqjeG0o1y7CJGGP40OI0cFJfpne2drnodu_5CUShAZ4Ekfp9fadW3nIpS_LjyofsvUMeJ_i3Y41rJr1-ws0N9F4bqkLxl38XQ7brYqVUZhzAAMws-Xvud13FIwt4jZ-U0wXA8njM/s400/spx.png" width="400" /></a></div>
<br />
Still looking for some retracement perhaps testing the lows. While stocks have continued to rally, the levels still are merely approaching a 50 week moving average and the .618 retracement. Still is within the realm of a normal retracement.<br />
<br />
I was looking at some different wave formations and am open to a new hypothesis. Previously, I had been looking at the move from the highs as the First wave (A) down in a corrective phase. Normally, a correction goes through an A-B-C correction phase before continuing along its merry way. In reviewing a line chart, I was noticing how the last wave up may not have been a normal 5 wave Up move. It might only been three waves and that would indicate that it might be part of a correction. Corrective formations often go with a 3-3-3 or 3-3-5 wave count. As we can see in the above chart, we could have had an a-b-c down for the big A followed by an a-b-c up for the Wave B and now can be on the final C wave. This could be either an a-b-c or a five wave move down. Elliott Wave analysis is not predictive but a historical perspective of waves. Few agree on what the current wave structures are and often, those who have made historical analyses are often required to make revisions based on more recent moves.<br />
<br />
So it's all a crap shoot so to speak. Fundamentally, there is nothing to hang your hat on here. The chatter is that stocks are looking out one year now but we all know the reality. The economy is shut down to a large extent, some 20 million people or more have lost their jobs while millions more are in furlough status. No one can predict what can come and for this reason, I am not currently in anything except for the gold and silver stocks along with a smattering of oil stocks that are horribly cheap. Whether they will survive or not probably depends on who will win the presidential election in November. The current president wants to preserve and enhance the oil sector to the point of being a net exporter. The previous administration shut down coal and was less favorable to the oil industry to the point where law suits were considered over environmental concerns. <br />
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And that is more or less how I have been advising people all through the year. Even at the highs, it seemed pretty likely that some event would happen to try to bring down the stock market in an effort to discredit the current president, who has flaunted the market highs as an indication of his great success. The bottom line was, if you feel that the president can rebuild the economy quickly, then buy stocks. It would be a vote for the president. If you believe that he will fail and will lose the next election, then don't buy stocks.<br />
<br />
My lack of conviction in the market is not a vote for or against the president, it is my general opinion that even from the 2009 to 2020 bull run, I have felt that the market is all smoke and mirrors, propped up by Federal Reserve stimulus, Computer-driven market activity, corporate buybacks and even foreign central bank stock buying. With interest rates paying next to 0 and pensions and insurance companies moving to stocks to generate any kind of return, if the markets falter, the whole system will collapse, including my pensions. Ugghhh. I guess that's why I am an advocate of precious metals because if all else fails, and a continued collapse in stock prices might ensure that, what's left?<br />
<br />
And the downside even there is that three times in the past, the US government has made it illegal to own gold. At this point, I shake my head knowing the futility there is in trying to plan for the future.<br />
<br />
Ignorance is bliss I suppose. Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-10763350537343270312020-04-14T19:33:00.001-05:002020-04-14T19:33:35.979-05:00Just Buy What the Fed is Buying<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgb7dfp_v8gsQ72c20x1ZhcJuDlKADTKtqW8eRugUEwqOlgkSJmSTsg2rMAOvVgdp3bxILu8O1SV68JtPoyyMDeh5jvVBr0thlWXf2K_M1WmKHO6YfN9eLuwJAjsOQ_DkfSAnzd6mMBAKr1/s1600/spx+daily.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgb7dfp_v8gsQ72c20x1ZhcJuDlKADTKtqW8eRugUEwqOlgkSJmSTsg2rMAOvVgdp3bxILu8O1SV68JtPoyyMDeh5jvVBr0thlWXf2K_M1WmKHO6YfN9eLuwJAjsOQ_DkfSAnzd6mMBAKr1/s400/spx+daily.png" width="400" /></a></div>
<br />
The stock market continued rallying after a brief resistance that the 50% retracement level.<br />
<br />
Some are already throwing in the towel admitting that some are just buying what the Fed is buying. <a href="https://www.zerohedge.com/markets/investing-now-dead-worlds-largest-asset-manager-says-well-just-buy-whatever-central-banks" target="_blank">Investing is Dead</a><br />
<br />
This was exactly my point last week in noting that the Fed is now committed to buying corporate bonds, including Exchange Traded Funds that are less than stellar quality. <br />
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The market continues to soar even as the economy is shut down with no idea when it will reopen and what consumer attitudes will be. It will be a brand new world perhaps.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRwDgUm_p-MmgiXcJIdHKE3TcbiRqpASGxVc3RqhdSx28ktX7fqiK61X28bq8tvmDWYcA3qIuK4JDX5Scwadsp9RH2lu6A2jyKir9Xs1_Itf1D_rjLSL6Q4w-LhwRI8CRIf363b1TGkhY0/s1600/best+of+times.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="524" data-original-width="680" height="307" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRwDgUm_p-MmgiXcJIdHKE3TcbiRqpASGxVc3RqhdSx28ktX7fqiK61X28bq8tvmDWYcA3qIuK4JDX5Scwadsp9RH2lu6A2jyKir9Xs1_Itf1D_rjLSL6Q4w-LhwRI8CRIf363b1TGkhY0/s400/best+of+times.jpg" width="400" /></a></div>
<br />
The irony here in this scene is the continual narrative that we have been hearing for the past 12 years and even longer. The rich continue to get richer, thriving despite millions of American workers being laid off or furloughed. <br />
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The classic tale of two cities. I remember way back when, I would hear Rick Santelli on CNBC jumping for joy as economic numbers would come in weaker than expected, dropping interest rates further. This is great for the homeowners, he would exclaim, you can refinance at a lower rate.<br />
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Markets would rally across the board, even as they are doing today. But the economic fundamentals continue to weaken.<br />
<br />
What can one do? I can imagine many are kicking themselves for getting out of the market only to see it come roaring back. Most certainly it will probably keep roaring on until every last one gets sucked back in. And who knows, the market can go much higher.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgO77Q6xs9HwOtIhMPXpafaqFmUTvsHxYad3GEgvcbW4f-CTIZoqjY3KhRy12JVfxcsN6Dfyvg_8DwYV33D28Cvx5gEntmQ9K-dT94gKcjvTwWZQtw2EkxcXe4Kw-NY3OpznxKLXxrYQAPo/s1600/Fibs.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgO77Q6xs9HwOtIhMPXpafaqFmUTvsHxYad3GEgvcbW4f-CTIZoqjY3KhRy12JVfxcsN6Dfyvg_8DwYV33D28Cvx5gEntmQ9K-dT94gKcjvTwWZQtw2EkxcXe4Kw-NY3OpznxKLXxrYQAPo/s400/Fibs.png" width="400" /></a></div>
<br />
As one theory goes, a 50% correction would be normal. Basing from the lows of 2009, we came close to a 50% correction, but not quite. A rebound from the 50% retracement can be expected to move to the -.23 Fib level, above 4000 on SPX.<br />
<br />
We can see that Stochastics, the lower indicator, is coming out of a bottom and could start heading up. <br />
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Anything is possible I suppose but the markets are being levitated on the same old suspects, the FANG stocks: Facebook, Amazon, Netflix and Google.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7mCPARSPjvbcrAhO4xobCppBcC4lRGxxU4d8d3StuJrCxQkLOq6hTyne-T04JjbVXzmKVosRUzNr2j-tFrVBItO5aBma6VZxlbTWVe6UqxlF5ilEmnLJxt8twRMrGHMDFopRppk5hQZlF/s1600/amzn.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7mCPARSPjvbcrAhO4xobCppBcC4lRGxxU4d8d3StuJrCxQkLOq6hTyne-T04JjbVXzmKVosRUzNr2j-tFrVBItO5aBma6VZxlbTWVe6UqxlF5ilEmnLJxt8twRMrGHMDFopRppk5hQZlF/s400/amzn.png" width="400" /></a></div>
<br />
Amazon hit new highs today as did Netflix.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvXHo9ZJHMmSWe5ywEbEeAZvIoJYA8kN9iKzWylQOvCjTOzzl-kCixKIXd36IWhjzFQM97pvN0Grbu5WCbnGUF33f_qdNhBrBukkBB8AHDPrn512p7s_-dEkcnU6m73IIw9OyCPASAJ3EL/s1600/neflx.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvXHo9ZJHMmSWe5ywEbEeAZvIoJYA8kN9iKzWylQOvCjTOzzl-kCixKIXd36IWhjzFQM97pvN0Grbu5WCbnGUF33f_qdNhBrBukkBB8AHDPrn512p7s_-dEkcnU6m73IIw9OyCPASAJ3EL/s400/neflx.png" width="400" /></a></div>
<br />
Just as in the past, it's been but a few stocks boosting up the indices. These are the highly capitalized stocks that have the biggest influence on the market averages. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7GWzhLf4RKTRrOxtBLg-ihFOaYTupDHLqvXxYRgtp2imtzCXSJtuQYv5ysO11HwcYZBOiWghRLV1fP0NiHRH0gto1e2M0XaGWP5yD355ba4DsTznntMFbI3j_mqOETJrHCbns8l58c_9H/s1600/gXW9JRKD.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7GWzhLf4RKTRrOxtBLg-ihFOaYTupDHLqvXxYRgtp2imtzCXSJtuQYv5ysO11HwcYZBOiWghRLV1fP0NiHRH0gto1e2M0XaGWP5yD355ba4DsTznntMFbI3j_mqOETJrHCbns8l58c_9H/s400/gXW9JRKD.png" width="400" /></a></div>
<br />
Compare those to a former market darling, DuPont. Traditionally one of the bluest of blue chip stocks, DuPont along with other "quality" stocks.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjijepAompegHDEyssex5XikrKEjqhno4rMsO3flEF_E6WLi7DiKgcW3L-BDutfmyHdUPYtQBwPLZ3_bJWpbj4n5L5Y-0YPuybxyJ5HzgQ9o5R53yXMZGIubDnMFHDxxylcZPRujw0w6VjW/s1600/abc.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjijepAompegHDEyssex5XikrKEjqhno4rMsO3flEF_E6WLi7DiKgcW3L-BDutfmyHdUPYtQBwPLZ3_bJWpbj4n5L5Y-0YPuybxyJ5HzgQ9o5R53yXMZGIubDnMFHDxxylcZPRujw0w6VjW/s400/abc.png" width="400" /></a></div>
<br />
I will stick by my guns and anticipate that a further market decline will play out. While I don't hold the possible depression scenario that I posted a few weeks back, a normal correction should at least exhibit an A-B-C corrective wave. <br />
<br />
At some point, we should get another leg down, retesting the low or breaking through to a lower low.<br />
<br />
Still that won't be the end of the world. I view the move from 2009 to our recent highs as merely a Wave 1 of a 5 wave bullish structure that can carry us higher for at least another decade. <br />
<br />
While some states might begin opening up next month, there are going to be quarters to come showing very bad economic numbers. The emerging optimism is fueled by incredibly massive amounts of Federal Reserve and Treasury Department stimuli. Markets are pretty much machine run these days and previously, much of the fuel came from corporate buybacks. Those buybacks may be drying up as those corporations taking the federal stimulus will be restricted from buying back stocks.<br />
<br />
Seems certain that earnings will fall and PE ratios, book value and other fundamental metrics will look awful. <br />
<br />
_______________________________________________<br />
<br />
Bottom line, the market continues to be a casino, a ponzi scheme, a bigger fool theory scam. I continue to favor cash and gold. Massive money creation SHOULD result in precious metals prices improving.<br />
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Gold continues to surge and broke through to new multi year highs this week. Gold stocks as well have been soaring, many touching new high levels as well. <br />
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Physical gold remains scarce and that which is available is fetching close to a 10% premium over spot price. Keep in mind, physical metals as well as gold stocks are a tiny market. If institutional buyers start moving into this area, prices can be expected to surge.<br />
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<a name='more'></a>One of my favorites is Franco Nevada Corp. a gold streamer.<br />
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Another is Barrick Gold<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieKB-HmEfO3KlAoLh5eyoO1VbxQtL-02_YgJNVSM8C12Omb6VGS9kF5gIqC9-GZGOK0bO6TDHZn31WzGrtkQaAfIk7VHrkf8gxuXQRmm-Ran2RL7N1aqet5_3_MwWWOerrVljApf027ksx/s1600/barrick.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieKB-HmEfO3KlAoLh5eyoO1VbxQtL-02_YgJNVSM8C12Omb6VGS9kF5gIqC9-GZGOK0bO6TDHZn31WzGrtkQaAfIk7VHrkf8gxuXQRmm-Ran2RL7N1aqet5_3_MwWWOerrVljApf027ksx/s400/barrick.png" width="400" /></a></div>
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These are the stocks that I've been investing in and finally they are starting to explode. <br />
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I am also building a cash reserve in anticipation of grim economic times to come, should that play out.<br />
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Already, many are unable to pay their mortgages and while there is some federal relief on this, how long can mortgages go unpaid until another wave of defaults sweeps through the world. Real estate prices are also in a bubble. Prices have been driven by easy credit and perhaps now, that bubble will pop. I'm hoping that finally I can buy my beach house. Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-38198699299344037222020-04-11T12:04:00.000-05:002020-04-12T14:01:46.060-05:00Fed Returns to Boost Market - Will We Ever Have Reality Again?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYNLXnOBcckgmptzP-eAdoXT5r7L2XFej3sG_LLaFDF0bsDd8g2OGF-dJ-mW75jysvCX-DMmq4Ki4SjiUFo8CMqIx77-c9oPpsBlIN7XWdVWlVEiFZVoKfffrz9Rc12TtwJAe9_p6exIKM/s1600/SPX+daily+1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYNLXnOBcckgmptzP-eAdoXT5r7L2XFej3sG_LLaFDF0bsDd8g2OGF-dJ-mW75jysvCX-DMmq4Ki4SjiUFo8CMqIx77-c9oPpsBlIN7XWdVWlVEiFZVoKfffrz9Rc12TtwJAe9_p6exIKM/s400/SPX+daily+1.png" width="400" /></a></div>
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<br />
Stocks staged a massive rally this week with the S&P 500
rallying more than 300 points or 12.2% from the previous week.<span style="mso-spacerun: yes;"> </span>Of special notes, REITS (real estate investment
trusts) rallied the sharpest, rising 24%.<span style="mso-spacerun: yes;">
</span>Midcap stocks which have been underperforming for quite a while also
turned in stellar weeks, with the Midcap (MDY) and Russell 2000 (IWM) rising
18%.<br />
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From an industry perspective, all sectors of the market
rallied.<br />
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Basic Materials, a sector that failed to make new highs in
the latest market bull thrust, performed best, rising 20.6%.<br />
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<span style="font-family: "calibri" , sans-serif; font-size: 11.0pt;">Closely following was the financial sector,
rising sharply on the Federal Reserve Bank’s latest stimulus announcement</span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><a href="https://www.cnn.com/2020/04/09/economy/federal-reserve-stimulus-states-cities/index.html" target="_blank">Federal Reserve Stimulus - CNN article</a><br />
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I had been paying close attention to a number of exchange-traded
funds to gauge the health of the US economy.<span style="mso-spacerun: yes;">
</span>It appeared to me that low interest debt had enabled businesses that
might have failed in 2008-2009 to remain.<span style="mso-spacerun: yes;">
</span>These had often been referred to as Zombie Corporations.<span style="mso-spacerun: yes;"> </span>As interest rates continued to fall,
businesses were able to issue more and more debt to stay afloat.<span style="mso-spacerun: yes;"> </span>Eventually, some event would trigger this
debt to default. It was my thought that when these ETFs started to drop in price, it would be an indication of an impending recession. <br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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One of my proxies for this lower quality debt was an
instrument with the ticker symbol JNK.<span style="mso-spacerun: yes;">
</span>As the symbol implies, the debt held in this ETF is just that,
junk. You can see that this ETF price fell off a cliff. There was a real possibility that heavily debt-ridden companies would go bankrupt. But that reality quickly came to an end as the Fed announced that they would bail out not only quality corporations, but shaky corporations as well as states, counties and likely foreign banks and governments as well. Soon the Fed will own the entire world.<br />
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Other ETFs that the Fed may now be buying include:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQg3VsB-8m0twrY-WTtQbb_p_h6V5MpOEzeRRuJShu2ZzWVyU6WmsznGGAYgCRQ-hR7T5NhiyHz14PADmdrmYHE7k2V-7mXBW3inaDn7tEzvTHUMsbrY4ZaIY1y-N0FdOiJ2xT7G2Y8_SM/s1600/ETFs%252520bought%252520by%252520the%252520Fed.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="735" data-original-width="1078" height="272" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQg3VsB-8m0twrY-WTtQbb_p_h6V5MpOEzeRRuJShu2ZzWVyU6WmsznGGAYgCRQ-hR7T5NhiyHz14PADmdrmYHE7k2V-7mXBW3inaDn7tEzvTHUMsbrY4ZaIY1y-N0FdOiJ2xT7G2Y8_SM/s400/ETFs%252520bought%252520by%252520the%252520Fed.jpg" width="400" /></a></div>
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If the Federal Reserve Bank can buy these ETFs, and the Fed
can’t lose money, then if could be foolish to try to fight the trend.<span style="mso-spacerun: yes;"> Or so it seems.</span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b>What's Next?</b><br />
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In a normal world, the rally to the 50% retracement level is
by no means extraordinary.<span style="mso-spacerun: yes;"> </span>While many
oohh and ahh over the remarkable rally, the Fibonacci retracement levels
automatically include a 50% retracement along with the real Fibs of .328 and
.618.<span style="mso-spacerun: yes;"> </span>In some theories, prices failing
at the 50% retracement level can be expected to fall to the -.23 level. This would suggest S&P prices falling to the 1900 level.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5g6I0Rvhdj5wiZ7Hu-9XjUKnZwU_78ytJrFkoKgS7r3bfifkCsbiK6b3bEEhcgOfF23oMyxf-nigR09MGWc5eKBL4eQXNNyp6HwxVlPo3eFO5pMrXh8a7t6owiaJ6xdwfkIObU7O6r5F5/s1600/SPX+w+fib.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5g6I0Rvhdj5wiZ7Hu-9XjUKnZwU_78ytJrFkoKgS7r3bfifkCsbiK6b3bEEhcgOfF23oMyxf-nigR09MGWc5eKBL4eQXNNyp6HwxVlPo3eFO5pMrXh8a7t6owiaJ6xdwfkIObU7O6r5F5/s400/SPX+w+fib.png" width="400" /></a></div>
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It's hard to imagine this to happen though. Despite 16 million people filing for unemployment and businesses across the world being shut down, liquidity has always seemed to reign supreme, despite any fundamental support.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRkeze0AubZ9Fyvudm9YPNg_Fcz3ObKXyR76TnKICxh54Tb6yrUtts-lWQDh-pwjDaESrrJQJVXDkbW8gqh0dCXPjGBtyiRb2b-izX0m_F8XoqWaDDkbsJ8pXX-xOK7ZsqsBxM-nF4_2Pw/s1600/best+of+times.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="524" data-original-width="680" height="307" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRkeze0AubZ9Fyvudm9YPNg_Fcz3ObKXyR76TnKICxh54Tb6yrUtts-lWQDh-pwjDaESrrJQJVXDkbW8gqh0dCXPjGBtyiRb2b-izX0m_F8XoqWaDDkbsJ8pXX-xOK7ZsqsBxM-nF4_2Pw/s400/best+of+times.jpg" width="400" /></a></div>
Once again, markets have no correlation with reality.<br />
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<b><br /></b>
<b>Money Supply Spikes</b><br />
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<b><br /></b>
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<b></b><br />
As the chart of the M1 money supply illustrates, money supply has been surging to dizzying heights, now backed not only by government treasuries but also a wide range of corporate bonds. Some can interpret this as the Federal Reserve Bank and the US Treasury taking control over US corporations.<br />
<br />
<br />
The increase in the money supply is said to be temporary and will be pulled back when things normalize. But as we've seen post-2009, things never normalized. Any attempt to decrease the money supply was met with swift negative market reactions. This is the new reality, 0% interest rates, increasing Federal Reserve stimulus actions to keep the financial structure afloat; many suggesting that it won't be long until the Federal Reserve starts buying stocks. Again, does it make any sense to fight the Fed? It does appear to be inevitable. But ultimately, must it fail? <br />
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I thought it might but after 11 years of the Fed-controlled market, I do not expect to see a normalization in my lifetime. As such, I choose to stay out of stocks, except for special situations such as some gold and silver mining stocks. <br />
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I continue see gold still as a safe haven. In times of loss of confidence in fiat currencies, gold stands out as one asset that can provide purchasing power.<br />
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Gold futures rallied to new recent highs but still are a few hundred off of the lifetime highs. One can expect gold to continue rallying and perhaps even silver following. <br />
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<b>Two Schools of Thought</b><br />
<b></b><br />
Inflations: Gold and real estate are often said to be good hedges against inflation. The sharp move in REITs this week along with gold making new highs supports this view.<br />
<br />
Deflation: How quickly will the economy recover? Some suggest that things won't start getting back to normal in July, the President is pushing to get things moving as quickly as possible. A slowing economy might present a deflation scenario. Holding US dollars is often recommended to ride out this storm. <br />
<br />
I suggest holding both. <br />
<br />
<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-65332585448209059322020-04-04T07:24:00.003-06:002020-04-04T07:24:32.111-06:00Corrections vs Bear Market What to Expect Next<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOTdGEY2scnbzoZYtaZ5AB_cnnc9rDz_H0vcJIjaja91GEmWVBqiDXGP8bh3gpdytg6TAGWwXhHe2KcS01QO3cIoUYTpz_Kc4H7kFhTuwsrQyTvdr4-M5uKleHPdqMwxSfXVcJnjEzx_Os/s1600/PRices.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="463" data-original-width="1600" height="115" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOTdGEY2scnbzoZYtaZ5AB_cnnc9rDz_H0vcJIjaja91GEmWVBqiDXGP8bh3gpdytg6TAGWwXhHe2KcS01QO3cIoUYTpz_Kc4H7kFhTuwsrQyTvdr4-M5uKleHPdqMwxSfXVcJnjEzx_Os/s400/PRices.png" width="400" /></a></div>
<br />
<br />
Review of indexes for the week.<span style="mso-spacerun: yes;"> </span>Russell 2000 and Midcaps took the brunt of
the sell-off, losing 6 to 7 percent.<span style="mso-spacerun: yes;">
</span>REITS got whacked the hardest, down 10% on the week.<span style="mso-spacerun: yes;"> </span>Longer term bonds held up as did gold but all
in all, it was a poor week.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0VoztaSIUqaoJqiOrCkijG6YNLwfJ1PAvwm8t9DSJJ_U1xTAgphfS7BVv5PZADl2PnSumBsTI9rhdBTiae6tbCJZ-NgTZUnN0ywV4EofFu6K4hxjcozaI81QiN4YimJ-CJKtLPnDmoOwF/s1600/SPX+Three+Week+Test.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0VoztaSIUqaoJqiOrCkijG6YNLwfJ1PAvwm8t9DSJJ_U1xTAgphfS7BVv5PZADl2PnSumBsTI9rhdBTiae6tbCJZ-NgTZUnN0ywV4EofFu6K4hxjcozaI81QiN4YimJ-CJKtLPnDmoOwF/s400/SPX+Three+Week+Test.png" width="400" /></a></div>
<br />
<span style="font-family: "Calibri",sans-serif; font-size: 11.0pt; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Projecting possible scenarios for next week, my
first setup is a possible three week test of the low.<span style="mso-spacerun: yes;"> </span>In this scenario, the closing price will test
the 2305 level and hold.</span><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9_6O9ALJyjIP8BFIOHqHe1MRNuyN6mdm4DUZDv7ySqwpEfTmBcVMUb_GA5zzdSyqZ7r0cYJoTWDknwl9xT7v01ReP2GxxeP7OX4F-NUdQCqBa1AAMuBPmvElBXw9Ngzlf1rla6xrRAmbO/s1600/Size.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1032" data-original-width="1422" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9_6O9ALJyjIP8BFIOHqHe1MRNuyN6mdm4DUZDv7ySqwpEfTmBcVMUb_GA5zzdSyqZ7r0cYJoTWDknwl9xT7v01ReP2GxxeP7OX4F-NUdQCqBa1AAMuBPmvElBXw9Ngzlf1rla6xrRAmbO/s400/Size.png" width="400" /></a></div>
<br />
<br />
Looking at my Size indicator, there is no sign of the trend
weakening, on the 20 week moving average.<span style="mso-spacerun: yes;">
</span>I mentioned last week that the Size indicator on the 4 week average had
reversed for a short-term pop, but if we look at SPY (the SPX ETF proxy), we can
clearly see that price only bounced to the 4 week average and reversed.<span style="mso-spacerun: yes;"> </span>This demonstrates the general rule that when
Size reverses, it will likely revert to the mean.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-ThJGP3-ezn8hvzkmgB3DA41pL-GwRIVDCycmpCk9UPVpAH4lTXxKsDGVvzkrMreIVvq7NSG2eq8F3RcJYwumv6tOvTgEvqScZzg-u1MiPbXY5LhuHUmdYu0fkuJ9-3Fo9v54kXewUgYu/s1600/SPY+4.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1032" data-original-width="1422" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-ThJGP3-ezn8hvzkmgB3DA41pL-GwRIVDCycmpCk9UPVpAH4lTXxKsDGVvzkrMreIVvq7NSG2eq8F3RcJYwumv6tOvTgEvqScZzg-u1MiPbXY5LhuHUmdYu0fkuJ9-3Fo9v54kXewUgYu/s400/SPY+4.png" width="400" /></a></div>
<br />
<span style="font-family: "Calibri",sans-serif; font-size: 11.0pt; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">This generally shows that price could not get
past the first barrier, the 4 week average, and will likely head lower.</span><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<b>A-B-C Correction</b><br />
<b></b><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf9eMhuv_pQsxNgw1wMCGTdXFmDuZuU6cfokipLZ2n7LrA0sagZxnQagRhq9SbuTDRZeQ_ZwUzyY8gGJ1AFSG_BCJK6BMmKCTS_oJf-OA1DC_72jQkdsCjSSw7AhZeazTGoOL5mCBJPcWu/s1600/SPX+ABC+Wave+Projection.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf9eMhuv_pQsxNgw1wMCGTdXFmDuZuU6cfokipLZ2n7LrA0sagZxnQagRhq9SbuTDRZeQ_ZwUzyY8gGJ1AFSG_BCJK6BMmKCTS_oJf-OA1DC_72jQkdsCjSSw7AhZeazTGoOL5mCBJPcWu/s400/SPX+ABC+Wave+Projection.png" width="400" /></a></div>
<br />
<br />
Another scenario, more favorable for traders, would be that
stocks do an A-B-C correction phase, going sideways for several months before
dropping lower.<span style="mso-spacerun: yes;"> </span>As the Fibonacci
projection level indicates, prices can drop down to the 1850 level or even
1350. <span style="mso-spacerun: yes;"> </span>In an Elliott Wave theory world,
this would be the completion of a Major A wave and would be followed by a B
Wave, taking prices higher before making a final C wave lower.<br />
<br />
<br />
Corrections can be ugly and long lasting.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<b>A Correction - Micron Tech (MU)</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkxXuhhpzGT9Q6xKabCNrSHU7-VkrkW1rbS9zJw4euUdvzn528wlMdrjTV7-pi4w3IHFa8uVhPeDYx9DSYRZ_3OY0hrpKObeMAtXRZW_NiUoiAMc1n72l-fnfYb5wEyBY0eiZ26cBY3DwO/s1600/Corrections+can+be+ugly+MU.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkxXuhhpzGT9Q6xKabCNrSHU7-VkrkW1rbS9zJw4euUdvzn528wlMdrjTV7-pi4w3IHFa8uVhPeDYx9DSYRZ_3OY0hrpKObeMAtXRZW_NiUoiAMc1n72l-fnfYb5wEyBY0eiZ26cBY3DwO/s400/Corrections+can+be+ugly+MU.png" width="400" /></a></div>
<br />
<br />
<br />
One example I like to look back on is Micron
Technologies.<span style="mso-spacerun: yes;"> </span>Tech stocks have seen
their share of ups and downs.<span style="mso-spacerun: yes;"> </span>From 1995
to 1999, Micron went through a garden variety correction, ranging from a high
of 48 down to 8, more than 80%.<span style="mso-spacerun: yes;"> </span>There
was light at the end of the tunnel though as we see that Micron and tech stocks
in general recovered and surged to new highs.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<b>Bear Market</b><br />
<b></b><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWEXMd-Ru-Pwk8_lkJWTimz6WdxNxCd7tlZJmg4HIOlMmdMr_qUFy_9gvHiZop_J0jBNSso1qUk-jb_lTYfOQKJIRUMWbvGyBG7YtnOpZ095vxc2uUj04tmDEislHf3rnCDPpeQEGhxhEP/s1600/MU+bubble+collapses.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWEXMd-Ru-Pwk8_lkJWTimz6WdxNxCd7tlZJmg4HIOlMmdMr_qUFy_9gvHiZop_J0jBNSso1qUk-jb_lTYfOQKJIRUMWbvGyBG7YtnOpZ095vxc2uUj04tmDEislHf3rnCDPpeQEGhxhEP/s400/MU+bubble+collapses.png" width="400" /></a></div>
<br />
<br />
<br />
What came next however is what is commonly referred to as
the Tech Bubble.<span style="mso-spacerun: yes;"> </span>When that bubble burst,
we can see that Micron dropped from close to 100 down to 30.<span style="mso-spacerun: yes;"> </span>Eventually, price dropped close to 0 in this
chart.<span style="mso-spacerun: yes;"> </span>The decline lasted for more than
a decade.<span style="mso-spacerun: yes;"> </span><br />
<br />
<br />
<br />
Needless to say, few of us alive have witnessed such a
devastating decline in the overall stock market.<span style="mso-spacerun: yes;"> </span>Over time, the stock market has tended to
recover and move to new highs.<span style="mso-spacerun: yes;"> </span>But some
of us sceptics have noted that prices have been boosted by tremendous amounts
of stimulus from the Federal Reserve.<span style="mso-spacerun: yes;">
</span>With interest rates close to 0%, corporations, financial institutions
and even Central Banks have been borrowing money and buying stocks.<span style="mso-spacerun: yes;"> </span>The stock market is a “house of cards” built
upon endless increases of debt.<br />
<br />
<br />
The last time the “house of cards” collapsed might have been
in the depression era.<span style="mso-spacerun: yes;"> </span>How did stocks
look then and if we follow the same scenario, what might we be able to
anticipate?<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b>Great Depression (1929-1932)</b><br />
<b></b><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjy9XJxmM6MvCk0oPlYZEkFkdOvaKk8HEf_CwKUh9aKViqgCHH_jQCpfVyxg6S39PLeWHj8emMd4RFkL0KRDNw_oHmd10z16Yu5V2H70kaiqj9g8Lax1S-x6VuHOb1meWSnYS2u9haWdPZ6/s1600/SPX+Depression.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjy9XJxmM6MvCk0oPlYZEkFkdOvaKk8HEf_CwKUh9aKViqgCHH_jQCpfVyxg6S39PLeWHj8emMd4RFkL0KRDNw_oHmd10z16Yu5V2H70kaiqj9g8Lax1S-x6VuHOb1meWSnYS2u9haWdPZ6/s400/SPX+Depression.png" width="400" /></a></div>
<br />
<br />
<br />
Here is what TradingView data presents for the SPX during
the depression era.<span style="mso-spacerun: yes;"> </span>Keep in mind that
the S&P Index wasn’t actually developed until around 1985 I believe so how
data is extrapolated is not clear.<br />
<br />
<br />
But assuming that this data is valid, we can see that the
first dip off of the highs went from 30 to 20, a 33% correction. That's pretty consistent with what we've experienced thus far.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMy2T87R8eWsU68za_U6CA46pb1upVojOoHJmQRhYTU9mJyy-7T48J6kF7wVugN4YGp_SzncMA4Vxr847Lsq0KZvP6zVq-aQzLmtowAUika9zH78mg73_PlIvXrJRe8pnvU_DfhgoBImXW/s1600/SPX+fib+retracement.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMy2T87R8eWsU68za_U6CA46pb1upVojOoHJmQRhYTU9mJyy-7T48J6kF7wVugN4YGp_SzncMA4Vxr847Lsq0KZvP6zVq-aQzLmtowAUika9zH78mg73_PlIvXrJRe8pnvU_DfhgoBImXW/s400/SPX+fib+retracement.png" width="400" /></a></div>
<br />
<br />
<span style="font-family: "Calibri",sans-serif; font-size: 11.0pt; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Stocks rebounded to the 50% before
collapsing.<span style="mso-spacerun: yes;"> </span>Prices stabilized for
several months, probably encouraging many market bulls to proclaim, THE
CORRECTION IS OVER!!.</span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMvBveSdN8w1wCl6hoJTl7-G-8wxciEvuvsz6MRbLhvAW9uSoq8BeekAa2yDqTklepXQ4ihkSlUwDmqRZ5CQNY8mx3a_IGJJIrZQHiEAE3X9WuL7VHPMDH2s-UbZhopTGHZfGZ9L6Rrd_P/s1600/20.10+to+4.77++three+quarter+test.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMvBveSdN8w1wCl6hoJTl7-G-8wxciEvuvsz6MRbLhvAW9uSoq8BeekAa2yDqTklepXQ4ihkSlUwDmqRZ5CQNY8mx3a_IGJJIrZQHiEAE3X9WuL7VHPMDH2s-UbZhopTGHZfGZ9L6Rrd_P/s400/20.10+to+4.77++three+quarter+test.png" width="400" /></a></div>
But as the long
term chart shows, prices continued down for a total of three years falling from
a monthly closing price of 30.10 down to 4.77.<span style="mso-spacerun: yes;"> </span><br />
<br />
It’s interesting to note that a bottom could have been
declared after a Three Quarter Test of the Lows.<br />
<br />
<br />
<b>Where are we at now?</b><br />
<b></b><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8JEGcw3gKRG1rt1n-Lqarh0lKBTqadTixFgKB2nlBkJm98quDsq3ZP8Jd0I3kW90geH5-luIlw9lecLZzU-RM0htuxB7IVzj244rEXckWVyszS3MNrb3bFTdRFRkXvGYP9qKe4Orh0Cvo/s1600/50+retracement+projection.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8JEGcw3gKRG1rt1n-Lqarh0lKBTqadTixFgKB2nlBkJm98quDsq3ZP8Jd0I3kW90geH5-luIlw9lecLZzU-RM0htuxB7IVzj244rEXckWVyszS3MNrb3bFTdRFRkXvGYP9qKe4Orh0Cvo/s400/50+retracement+projection.png" width="400" /></a></div>
<br />
<br />
From a Fibonacci Retracement perspective, a .328 retracement
is very weak.<span style="mso-spacerun: yes;"> </span>We tried to get above that
without much success.<span style="mso-spacerun: yes;"> </span>A 50% retracement,
similar to the bounce seen during the Depression would take us to close to 2800.<span style="mso-spacerun: yes;"> </span>Prices could even reach to the .618
retracement level.<span style="mso-spacerun: yes;"> </span>But without breaching
these levels and holding, the bounces are just that, normal corrective
bounces.<span style="mso-spacerun: yes;"> </span>We can see even back in the
Depression Days, prices followed these rules.<span style="mso-spacerun: yes;">
</span>Like Gold, they have withstood the tests of time.<br />
<br />
<br />
<b>Forward Planning Thoughts</b><br />
<b></b><br />
<br />
What do we do?<span style="mso-spacerun: yes;"> </span>I had
been buying physical gold and silver for the past four or five years.<span style="mso-spacerun: yes;"> </span>Now if it is obtainable at all, the premiums
have skyrocketed.<span style="mso-spacerun: yes;"> </span>Mining, refining and
transportation operations have come to a halt.<span style="mso-spacerun: yes;">
</span>New supply is not expected to be forthcoming any time soon.<span style="mso-spacerun: yes;"> </span>Like we see in general, few had been prepared
for such a situation.<span style="mso-spacerun: yes;"> </span>Even with the
precious metals, it was clearly understood that the next phase of the economy
would probably be a big deflation.<span style="mso-spacerun: yes;"> </span>This
would bring the prices of metals down along with everything else.<span style="mso-spacerun: yes;"> </span>Many of the skeptics chided that they would
then buy the gold and silver when the deflation occurred.<span style="mso-spacerun: yes;"> </span>Who knew that the physicals would be
unobtainable?<br />
<br />
<br />
<br />
Preparation is the key.<span style="mso-spacerun: yes;">
</span>While I would not categorize myself as a “prepper”, from a financial
planning standpoint, I had tried to look at all of my areas of risk and add
insurance for additional adverse events.<br />
<br />
<br />
<br />
I lived in Cleveland around 2001-02 and remember that we had a
blackout.<span style="mso-spacerun: yes;"> </span>It lasted just a day but life
was totally shut down.<span style="mso-spacerun: yes;"> </span>No coffee to be
had at the 7-11, cash machines did not work, credit cards did not work and
worst of all, most cashiers did not have basic math skills to be able to make
change!<span style="mso-spacerun: yes;"> </span>It was only one day but there
was nothing but chaos.<span style="mso-spacerun: yes;"> </span>I thought, what
would happen if this lasted for three days or five days?<span style="mso-spacerun: yes;"> </span>How long would it take for civil unrest and a
total melt down?<span style="mso-spacerun: yes;"> </span>Not long.<br />
<br />
<br />
<br />
No telling what may follow so I will give the same financial
planning advice now that I was giving clients then.<span style="mso-spacerun: yes;"> </span>Make sure you have a supply of currency on
hand and not $100 bills.<span style="mso-spacerun: yes;"> </span>Have what you
need and enough change on hand to be precise in your transactions.<span style="mso-spacerun: yes;"> </span>Second, I always encouraged having some
silver ounces or small gold denominations.<span style="mso-spacerun: yes;">
</span>People often ask me, what good is that?<span style="mso-spacerun: yes;">
</span>Who is going to transact in gold or silver?<span style="mso-spacerun: yes;"> </span>I don’t know but look at Venezuela?<span style="mso-spacerun: yes;"> </span>We will only know when it turns out that
having some gold and silver has value.<span style="mso-spacerun: yes;">
</span>Dah, don’t dismiss the effects of sound financial planning because you
can’t rationalize what might happen.<span style="mso-spacerun: yes;"> </span>Of
course, we can see now that if you didn’t do any of this pre-planning, getting
gold or silver now might be difficult and that in itself might make it
valuable.<br />
<br />
<br />
<br />
Also have enough cash on hand to last you at least a
month.<span style="mso-spacerun: yes;"> </span>Keep it at home in a safe if
necessary along with the gold and silver.<span style="mso-spacerun: yes;">
</span>In such a situation, you may not be able to access your bank or your
safe deposit box.<span style="mso-spacerun: yes;"> </span><br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<br />
<b>SDS for a Down Move</b><br />
<b></b><br />
<br />
Playing a move down.<span style="mso-spacerun: yes;">
</span>I put out a “go to cash” call during the past week as prices rebounded. <a href="https://www.tradingview.com/chart/ES1!/K5U2ZBpF-SP-Futures-Approaching-Selling-Point/" target="_blank">Time to Sell</a> <span style="mso-spacerun: yes;"> </span>Looking at the retracement levels, it seemed
prudent to go to cash.<span style="mso-spacerun: yes;"> </span>While I see the
potential for prices to go higher, based on the Fibonacci retracement levels,
it just didn’t seem worth the risk to stay in the market.<br />
<br />
<br />
<br />
I bought SDS as a way to play the move.<span style="mso-spacerun: yes;"> </span>This is a 2X inverse product that moves up 2%
for every 1% that the SPX moves down.<span style="mso-spacerun: yes;"> </span>As
a leveraged product, in times of low volatility, it may lose value.<span style="mso-spacerun: yes;"> </span>There are also products that can move 3X so
how you play it is up to you.<span style="mso-spacerun: yes;"> </span>If you are
a rookie, don’t play with instruments you don’t understand.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinSHzJZwru5We3LJgPNg-EcoKoVjlNp20IneDbsw6KZm3R2hCA29eUAykyEj2KTOqzxFYTg4uhgp_XPXTOHXT3RZPOTkPUv2bOPa3fqWhL1rkFatkid3W7-RQqyTQ-l8koTopwKFq9kBkm/s1600/SDS.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1165" data-original-width="1600" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinSHzJZwru5We3LJgPNg-EcoKoVjlNp20IneDbsw6KZm3R2hCA29eUAykyEj2KTOqzxFYTg4uhgp_XPXTOHXT3RZPOTkPUv2bOPa3fqWhL1rkFatkid3W7-RQqyTQ-l8koTopwKFq9kBkm/s400/SDS.png" width="400" /></a></div>
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<br />
As you can see, SDS has not fared too well as stocks had
been rising from 2009.<span style="mso-spacerun: yes;"> </span>At the high, it
was at 2131 and dropped as low as 22.<span style="mso-spacerun: yes;"> </span>It
closed at 32.50 for the week.<span style="mso-spacerun: yes;"> </span><br />
<br />
<br />
<br />
Be safe, stay healthy.<span style="mso-spacerun: yes;">
</span>Good Luck.<br />
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike><br />
<b>Regular Updates</b><br />
<b></b><br />
I add comments on things I see in the market on my Trading View page. <a href="https://www.tradingview.com/u/Glewis54/" target="_blank">https://www.tradingview.com/u/Glewis54/</a> These posts also go to my Twitter feed. <a href="https://twitter.com/AssetDesign" target="_blank">https://twitter.com/AssetDesign</a><br />
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If you like my ideas, subscribe to either.<br />
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-11490348217940173722020-03-28T07:50:00.004-06:002020-03-28T07:50:59.363-06:00Record Week on Wall Street<div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhafCAAYxSWlCNBNyrKJ8QS6ab7jL2-GSmw0ZLyZNhz0KGtli29euVFZUJyPBRxlO9vhl_SF682X77WT3s81bN5a_xH52tVuaqW5jHNeXv9-la1QQWoUcFjPjylcP6Qv6PJ5UOJ7ody-oia/s1600/spx+WEEKLY.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="611" data-original-width="1005" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhafCAAYxSWlCNBNyrKJ8QS6ab7jL2-GSmw0ZLyZNhz0KGtli29euVFZUJyPBRxlO9vhl_SF682X77WT3s81bN5a_xH52tVuaqW5jHNeXv9-la1QQWoUcFjPjylcP6Qv6PJ5UOJ7ody-oia/s400/spx+WEEKLY.png" width="400" /></a></div>
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Stocks rallied sharply this week, bouncing off panic-driven lows that had recently saw liquidations in almost all asset classes, save for the dollar and bonds.<br />
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The advance/decline line in my stock universe expanded to 149-16. Only one company was oversold.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiq8wlGjWjz5M-prGGcyYlODFPylBV7Yc2ijZlFwSUD4KTwPT6jOxypHPDvdSoZJDeqOcL3dwbgl2fLUG-ju5zjNLtEKVmpcFHK-r5MqX-iTrzEvQMilY4wgGb08-KI-UTJurS6_w2HcsVI/s1600/data.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="305" data-original-width="1600" height="76" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiq8wlGjWjz5M-prGGcyYlODFPylBV7Yc2ijZlFwSUD4KTwPT6jOxypHPDvdSoZJDeqOcL3dwbgl2fLUG-ju5zjNLtEKVmpcFHK-r5MqX-iTrzEvQMilY4wgGb08-KI-UTJurS6_w2HcsVI/s400/data.png" width="400" /></a></div>
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The S&P fared well however International stocks outpaced the US as the dollar fell back as the Federal Reserve and US Government continued to add massive amounts of liquidity to maintain the fragile economic system, currently locked down due to the pandemic situation.<br />
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In various sectors, Utilities did the best bouncing 11.5%.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZcSzoo96iCx7oql4vlUzD_c6X7fQK7uAC2mYi3gkEfs7pVIq7C1WZgdbJKlHOsdPxTKN4zxIz5ULU4swEtiun4s54T2TBdHJVZiQ6_cggNdK3wEOvDVzFc1YfiRNu6YEbyR432r8yK8rS/s1600/XLU.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="611" data-original-width="1005" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZcSzoo96iCx7oql4vlUzD_c6X7fQK7uAC2mYi3gkEfs7pVIq7C1WZgdbJKlHOsdPxTKN4zxIz5ULU4swEtiun4s54T2TBdHJVZiQ6_cggNdK3wEOvDVzFc1YfiRNu6YEbyR432r8yK8rS/s400/XLU.png" width="400" /></a></div>
<br />
The chart of a Utility ETF XLU illustrates the effectiveness of taking on a position at or below a long term upward trending moving average such as the 250 week exponential average. Another favorite average is the 40-month moving average.<br />
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Energy continued to lag however, it also eked out a normally respectable 4.4% gain.<br />
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REITs and Corporate Bonds outperformed, illustrating the powerful perceived effects of the stimulus package. Boeing also rose sharply leading the Dow average. Boeing rose some 66 points or 20% after dropping from recent dizzying highs exceeding 400 down to below 100. <br />
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What a beautiful top that formed prior to the fall. No surprise here. Prices are consistent with prices years ago. I'm not sure that we are out of the woods yet on this so I'm not recommending any buys.<br />
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Over much of the past 10 years or so, we've had many V-shaped bottoms in the market. Some are suggesting that now is the time to buy however I prefer to sit on the sidelines.<br />
<br />
Historically, stock prices are still expensive. I was looking at one really beaten down company as the chart looked compelling. Then looking at the P/E ratio, I saw that it was at 15, despite the huge fall. Back in the old days, a 15 PE ratio was a sell. Will we see stocks fall to bargain prices like with a 4 to 6 PE? Will we see stocks with price to book value under 1? Thinking what were historically "cheap" prices, I pulled back in my thoughts of nibbling on stocks, choosing instead to continue building cash and trying to continue acquiring gold and silver.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYDKaA5ehygnKq9-RxTnGrP9p0M4RDTPwvIfwJ7q3-ztLtAyct4aB242g3aJOR7GGJfaNRkyfjOqaTszWuGoqUYqVujFQXydPHyQrYNOOZR82q4R78deMPSUeC7BqMaU2VexcJ6qBcGiq5/s1600/SPY+20+week+size.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1032" data-original-width="1421" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYDKaA5ehygnKq9-RxTnGrP9p0M4RDTPwvIfwJ7q3-ztLtAyct4aB242g3aJOR7GGJfaNRkyfjOqaTszWuGoqUYqVujFQXydPHyQrYNOOZR82q4R78deMPSUeC7BqMaU2VexcJ6qBcGiq5/s400/SPY+20+week+size.png" width="400" /></a></div>
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A main indicator for me to start buying is my Size indicator. This is my terminology although not technically correct. I call it Size as it is the size of a standard deviation unit. I look at it as a price moving away from the trend line at a faster pace than the trend line is expanding. In other words, it shows the momentum of the price move. As this indicator continues rising, I don't want to be bucking the trend. When Size reverses, price will either regress to the trend line or catapult to the opposite extreme. Size has only reversed on a 4-week time frame. 10, 20 and greater time frames show continued downside momentum.<br />
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Some that I follow have long suggested that we will go through some cycle that would include significant deflation, followed by hyper-inflation. And so I look at what is occurring in the debt markets. Seems that real estate and other asset prices will only come down as debt gets defaulted on. Let's face it, over the years, the asset bubbles have been fueled by massive levels of debt. Once the "house of cards" begins to tumble, one would expect massive liquidations.<br />
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I have believed this for so many years now and find myself in the perfect position to take advantage of such a situation. But will it actually happen? The massive stimulus package passed yesterday adding $trillions to maintain the system holds off defaults, for the moment.<br />
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But there is deflation if we know where to look for it.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEha5DA6eBIMWilNxglrn5o2LTuUodpq_iBJqtPMcHsnyUD_8lf1V9biT2ivgI1B-8XzmKFykQbmIxBWyB7DG0psMUsXarKpp6lwycOoevpHJzUuD6YRUwXYkV9QEW0TpSV9YOGelTYlht8B/s1600/CL.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="611" data-original-width="1005" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEha5DA6eBIMWilNxglrn5o2LTuUodpq_iBJqtPMcHsnyUD_8lf1V9biT2ivgI1B-8XzmKFykQbmIxBWyB7DG0psMUsXarKpp6lwycOoevpHJzUuD6YRUwXYkV9QEW0TpSV9YOGelTYlht8B/s400/CL.png" width="400" /></a></div>
Crude oil is at prices not seen in decades. No one wants to touch it as international oil producers can't come to production agreements to pump up prices. Gasoline prices fell to under $0.50 during the week. Of course most never benefit that much as the tax burden on gasoline is now many times the actual price of the product. <br />
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I will be spending more time in the days to come looking at oil stocks that might survive. I had recently purchased some OXY and XOM seeing prices fall to levels that screamed BUY in my world. But the realities of debt have continued to weigh heavily on some of these companies so to get it right, one needs to delve into the area of actual financial analysis to figure out who has the best chance of coming out of this alive.<br />
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I do recall back in 2009, I just couldn't imagine that the banks would survive. A term came up this week special investment vehicle for use in the current stimulus package. Back in 2009, I was too aware of the special vehicles banks had to hold their riskiest assets. Accounting for these entities did not have to be added to their financial statements. I do believe that these entities still exist and remain the ticking time bomb in the banking system. Anyway, the point is, bank stocks were at deep discount and I spent more time arguing with proponents of buying bank stocks than actually accumulating any. What a mistake. Even Bank of America and Citicorp, two that I was certain would fail, are still hanging in there going strong. I had even rejected a job offer from Citi at that time fearing that they would fail.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjV3L7AjvVjxZstsdsZtQOX0dGtH-8z2bwS5qH_EskDVFz_xZp3RuJ2tJNUkvmr404FwLC4J1rL4JNYDU3xWHcHOKv1fvg2dQ7rm-UeT5YxWkJ7K-S4LLJ5gc554stzV_DMnGeTQnbjb4Kq/s1600/bac.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="611" data-original-width="1005" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjV3L7AjvVjxZstsdsZtQOX0dGtH-8z2bwS5qH_EskDVFz_xZp3RuJ2tJNUkvmr404FwLC4J1rL4JNYDU3xWHcHOKv1fvg2dQ7rm-UeT5YxWkJ7K-S4LLJ5gc554stzV_DMnGeTQnbjb4Kq/s400/bac.png" width="400" /></a></div>
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Ha Ha, in the world of Fib retracements, BAC rallied to a .618 retracement level. Perhaps my thoughts a decade ago will come true. I always sucked at market timing but my analysis has usually played out correctly.<br />
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Another area to look at in the deflation game is commodities. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBANd8cimPClq2nE0pvPdKXA8ABIfx-dnlWmu7t39HMFArC3cGcd58Pq_MZWtsTJgevXflRtrx3WDjI6viavvm3t-Yr6kOYG0DeDP1kuD7O_28oXQKgOH8qU01d55vir8MtXPTUzX9yGuX/s1600/gsg.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="611" data-original-width="1005" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBANd8cimPClq2nE0pvPdKXA8ABIfx-dnlWmu7t39HMFArC3cGcd58Pq_MZWtsTJgevXflRtrx3WDjI6viavvm3t-Yr6kOYG0DeDP1kuD7O_28oXQKgOH8qU01d55vir8MtXPTUzX9yGuX/s400/gsg.png" width="400" /></a></div>
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This is GSCI Commodity Index GSG. Need to do more research. Not sure if it is a leveraged vehicle or is a true reflection of commodity prices. The thought is this, we are in deflationary times and there may be incredible bargains out there if one knows where to look.<br />
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Inflation has to be on the horizon. Even hyper-inflation.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcgViJJSXBnYhS_mrW6WlAfsCSxIyL92KVfb-PGMRyS5ijnKnQN_bjCYZL7rqs2Hn0sqNONJ78uUiF31vni1EeXKvLnUQjI-ELXb0zKsPb2NmKRy1wJWPE0h7d-tWSDN9DTuHYY9DBjuH_/s1600/M1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="611" data-original-width="1005" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcgViJJSXBnYhS_mrW6WlAfsCSxIyL92KVfb-PGMRyS5ijnKnQN_bjCYZL7rqs2Hn0sqNONJ78uUiF31vni1EeXKvLnUQjI-ELXb0zKsPb2NmKRy1wJWPE0h7d-tWSDN9DTuHYY9DBjuH_/s400/M1.png" width="400" /></a></div>
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The money supply continues up and is sure to start moving parabolically as the Fed and Government appear to be merging to stave off the disaster that some see as inevitable. As the old saying goes, a few trillion her, a few trillion there, before you know it, we are talking about real money.<br />
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And if doubling the money supply has no effect on the dollar or interest rates, surely stimulus packages of $10 trillion will soon be forthcoming. We've got to find someplace to go with our dollars. <br />
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I welcome any comments, especially by trained economists who might have a professional insight into what is happening. These are serious times and we must be prepared.<br />
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-32980481083689393212020-03-22T09:20:00.003-06:002020-03-22T09:20:15.761-06:00No Place to Hide<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGrneFE8j5WOWJsJtJl3prXPincu_2jx-QrB1GkDUIcMGvTrPGNl0n8TZr4wboH-S3jhhORkkHSjswQJQ9UdhQpMroqP4j-KHwNX4wheMK5aahGmZQ_e8mWwFfFJaXyQiLfXY1JExi8vhm/s1600/spx.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="650" data-original-width="1139" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGrneFE8j5WOWJsJtJl3prXPincu_2jx-QrB1GkDUIcMGvTrPGNl0n8TZr4wboH-S3jhhORkkHSjswQJQ9UdhQpMroqP4j-KHwNX4wheMK5aahGmZQ_e8mWwFfFJaXyQiLfXY1JExi8vhm/s400/spx.png" width="400" /></a></div>
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Markets continued to collapse this week with stock prices falling 15%-30% as the new pandemic has swept the land.</div>
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I struggle with figuring out where to go from here. I have gone through all mental gymnastics and conclude that the only possible investment to make at this point is gold.</div>
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I think that much of it may depend on how you view the political situation and the technicals. If you are in the camp that we will recover from the current situation and rise from the ashes, then I put forth the above chart. SPX prices can expect to find support at the 50% retracement level around 2,000. Or prices may continue to fall as far as the 250-week Exponential Moving Average, 1,700. This in the past has shown solid support.</div>
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But upon reviewing my thoughts and charts, the reality is much worse than one can imagine. </div>
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As we move ahead, we see that the Federal Reserve has been adding massive amounts of money to the system to keep things afloat. The Congress has also been putting together a package to provide cash to everyone to keep the system afloat. This has long been termed "helicopter money" where the government drops money onto everyone to keep the system going. This has often been cited as the precursor to a Venezuela or Zimbabwe financial situation and is doomed to fail.</div>
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While many applaud the Central Bank and government for these money adding policies, it does mark the beginning of the end of the fiat currency system that has dominated the world for more than 40 years. The US Dollar.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMq_b7qIIJztaY2J_wwUXH-x9IdtjM3-Ys33pPIpztFY_2VaTHIP2KD7Zqyp-vA9-OqL2gekGcnKlMunAYbaB_mQIDQIMQb2iIIShIfbNam8tkKBa9BRa6UHpxiSX-sW8OxtiiA8P5033Z/s1600/M1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMq_b7qIIJztaY2J_wwUXH-x9IdtjM3-Ys33pPIpztFY_2VaTHIP2KD7Zqyp-vA9-OqL2gekGcnKlMunAYbaB_mQIDQIMQb2iIIShIfbNam8tkKBa9BRa6UHpxiSX-sW8OxtiiA8P5033Z/s1600/M1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="650" data-original-width="1139" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMq_b7qIIJztaY2J_wwUXH-x9IdtjM3-Ys33pPIpztFY_2VaTHIP2KD7Zqyp-vA9-OqL2gekGcnKlMunAYbaB_mQIDQIMQb2iIIShIfbNam8tkKBa9BRa6UHpxiSX-sW8OxtiiA8P5033Z/s400/M1.png" width="400" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMq_b7qIIJztaY2J_wwUXH-x9IdtjM3-Ys33pPIpztFY_2VaTHIP2KD7Zqyp-vA9-OqL2gekGcnKlMunAYbaB_mQIDQIMQb2iIIShIfbNam8tkKBa9BRa6UHpxiSX-sW8OxtiiA8P5033Z/s1600/M1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><br /></a></div>
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The M1 money supply illustrates the growth of the money supply that has been required to keep the financial system afloat. And now, we continue to see exponential growth in the policies being currently discussed.</div>
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But currently, we do not easily see the inflationary effects of this "money printing" in our daily lives. While such dramatic evidence of inflation as illustrated in this chart shows may not be occurring right now, it's more than certain that it will be soon.</div>
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How does this expanding MI affect you? As an investor, it may affect you in this way. If you are an owner of stocks, you may be thinking that oh my, this downturn is wiping me out. But the real truth is that the money printing has been wiping you out all along.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkisMlE-HRXw8m7k-Nn5F8Hn8HxLX8w079aIzMLAjlVK0Zyuo-XnFgcrayLqbqnLnAk1lTCFsbDWj_-2uh_dtwMXYZZwkpV0RUfhqOGgg9PSdE-Zs3HC2WWLcw17N0eXmPB3TeLIHIymld/s1600/M1SPX.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="650" data-original-width="1139" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkisMlE-HRXw8m7k-Nn5F8Hn8HxLX8w079aIzMLAjlVK0Zyuo-XnFgcrayLqbqnLnAk1lTCFsbDWj_-2uh_dtwMXYZZwkpV0RUfhqOGgg9PSdE-Zs3HC2WWLcw17N0eXmPB3TeLIHIymld/s400/M1SPX.png" width="400" /></a></div>
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This view shows you what the S&P 500 looks like when divided by the money supply. In the end, over the past 20 years, you have slowly been getting wiped out. The worst is yet to come. With this in mind, it's hardly worthwhile to recommend stocks for the long term. Not sure that there is anything we can do to hold off the monetary expansion and what is yet to come.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3l1AvpDWcnMVud9feWtN3HIq5dWuiKayVgFlAh1AqqcZmtXiyeP7QCBwaSQzCCXeWtma4jgbYPp9kdyVdVbxCMq0phuAn9NuVYCRFSHUls5oMqCVdV9GSJ6gGF3l84MaO9dTHepKi1ZfM/s1600/gld+m1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="650" data-original-width="1139" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3l1AvpDWcnMVud9feWtN3HIq5dWuiKayVgFlAh1AqqcZmtXiyeP7QCBwaSQzCCXeWtma4jgbYPp9kdyVdVbxCMq0phuAn9NuVYCRFSHUls5oMqCVdV9GSJ6gGF3l84MaO9dTHepKi1ZfM/s400/gld+m1.png" width="400" /></a></div>
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Here is gold versus the M1. It has fared much worse but appears to be more on an upward course. I suggest that owning gold is a superior alternative to paper money.</div>
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One also needs to be aware that the price of gold in terms of paper dollars is not quite realistic. Gold and silver prices plummeted in the past week as fears of deflation have taken hold. And while one may think that all assets are alike so one should stick with stocks instead of the ancient relic that many claim that gold is.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUdFXvAQLQMlxC_fhldrR4JIe9qfjUbA8GxeP9GR8LNVrmFH5a9-pAilg-ah_lEoOi9lXSbeFjKz3LpDPuSa7Oa1Pd2md-1Ock8oImHcnTR2G5nimxlVYWlJ4Nvhj1nj113cBKtynenspn/s1600/screen.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="1360" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUdFXvAQLQMlxC_fhldrR4JIe9qfjUbA8GxeP9GR8LNVrmFH5a9-pAilg-ah_lEoOi9lXSbeFjKz3LpDPuSa7Oa1Pd2md-1Ock8oImHcnTR2G5nimxlVYWlJ4Nvhj1nj113cBKtynenspn/s400/screen.png" width="400" /></a></div>
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Here is the reality. SOLD OUT. Those who claim that when the crisis hits, they will then turn to gold. The truth is though that the gold and silver markets are tiny compared to the world of paper currencies and investments. Paper financial instruments can be created at the touch of a keystroke. Hard assets on the other hand are labor intensive and have real value.</div>
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My final though for the week is Silver. Silver got smacked down to multi-year lows and now the gold:silver ratio topped at 120 this past week.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnNpgkydJ5azDHlk1bjCLNEY_XU_HUaBAznylGzrX0KnpnBOz7_ImUIzfbfXqxpQIV0Y4IXWjK47j-uZNBWiobQFW-r4fdZYPD47ij2xcHa8midReTQ7iZ0qy_H4KxyHe5mKHPXbrHVmki/s1600/goldsilver.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="650" data-original-width="1139" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnNpgkydJ5azDHlk1bjCLNEY_XU_HUaBAznylGzrX0KnpnBOz7_ImUIzfbfXqxpQIV0Y4IXWjK47j-uZNBWiobQFW-r4fdZYPD47ij2xcHa8midReTQ7iZ0qy_H4KxyHe5mKHPXbrHVmki/s400/goldsilver.png" width="400" /></a></div>
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I've heard miners say that the actual production ratio is now at 8:1 silver to gold. This makes silver quite possibly the best investment opportunity available. </div>
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Something has got to give here. These are my best thoughts for the weekend. Stay safe and good luck.</div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-20259776567956665032020-03-14T05:56:00.000-06:002020-03-14T05:56:10.701-06:00Market Chaos - Across the Board<div>
As suggested in the last posting, the market was in the process of topping. I had anticipated a three-week test of the high but prices continued to overshoot for one more week before collapsing. What has occurred since has shown some fundamental weaknesses in the system - and that is, too much debt.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIRfO7sfx-Mm9w-mhqD8UumZOHYFv3F6aFNMZcrix7WPY4xN_7xWeAfd27lVUGbdw1EgH64fjL7rE86g0Lc2LVJ9BEyM_mMfkPWhFBzM9M9j4HsqzZbAKTauEioOjEu-H9DrxUnQKU_yh5/s1600/data.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIRfO7sfx-Mm9w-mhqD8UumZOHYFv3F6aFNMZcrix7WPY4xN_7xWeAfd27lVUGbdw1EgH64fjL7rE86g0Lc2LVJ9BEyM_mMfkPWhFBzM9M9j4HsqzZbAKTauEioOjEu-H9DrxUnQKU_yh5/s1600/data.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="149" data-original-width="757" height="77" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIRfO7sfx-Mm9w-mhqD8UumZOHYFv3F6aFNMZcrix7WPY4xN_7xWeAfd27lVUGbdw1EgH64fjL7rE86g0Lc2LVJ9BEyM_mMfkPWhFBzM9M9j4HsqzZbAKTauEioOjEu-H9DrxUnQKU_yh5/s400/data.png" width="400" /></a></div>
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Hardly any market instruments were spared any pain. Stocks tanked while bonds soared, but then experienced extreme volatility. Gold, considered to be the ultimate safe haven also gave up gains that took the metal past $1,700. In my stock universe, 163 stocks declined while only 3 advanced. 83 stocks were below a -2 standard deviation on a 20-week average. Statistically, there is only a 2.5% chance that a -2 reading may occur, in a normal environment.</div>
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Of the three stocks that rose, I'll add UPS to this posting. It may rebound some 12 points from it's current 94 level before meeting serious trendline resistance.</div>
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On other positive notes, stocks and gold both held a .328% retracement level, generally indicating overall continued strength in both. However the weekly stochastic indicators point to lower prices that might continue for some time.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5M2AIVLiJwdV2D30LaI_4uD6l5PHnBUEzV9QFEIKpH1RyCSrKYLx603jJkddqDtjXsv9jprs9kjXOjvLK8dNXnGq082w-ylzPppMhJZTkxJs3HouE0xXzDKnYvd7JFuS_FVUxg-2LVxik/s1600/SPX+Week.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5M2AIVLiJwdV2D30LaI_4uD6l5PHnBUEzV9QFEIKpH1RyCSrKYLx603jJkddqDtjXsv9jprs9kjXOjvLK8dNXnGq082w-ylzPppMhJZTkxJs3HouE0xXzDKnYvd7JFuS_FVUxg-2LVxik/s400/SPX+Week.png" width="400" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5M2AIVLiJwdV2D30LaI_4uD6l5PHnBUEzV9QFEIKpH1RyCSrKYLx603jJkddqDtjXsv9jprs9kjXOjvLK8dNXnGq082w-ylzPppMhJZTkxJs3HouE0xXzDKnYvd7JFuS_FVUxg-2LVxik/s1600/SPX+Week.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5M2AIVLiJwdV2D30LaI_4uD6l5PHnBUEzV9QFEIKpH1RyCSrKYLx603jJkddqDtjXsv9jprs9kjXOjvLK8dNXnGq082w-ylzPppMhJZTkxJs3HouE0xXzDKnYvd7JFuS_FVUxg-2LVxik/s1600/SPX+Week.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><br /></a></div>
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In the SPX weekly price chart, we can also see that an important trendline, a 250 week exponential moving average that offered support in the past, continued to hold.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJAhcIQ_zYcZ_uOEFoF0Fx1k0DOrkHSMJC2FygtetmGr_CH4o8loO5V28YmVC5OB9qISh2XfkEFnZ6Nr6bMAKyEkCjExymhW_Syf7X23O2KFDUgd_wuFg1B7Bm2tV5q3Ao0GljyNA_E4Xj/s1600/SPY+20+Size.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1032" data-original-width="1421" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJAhcIQ_zYcZ_uOEFoF0Fx1k0DOrkHSMJC2FygtetmGr_CH4o8loO5V28YmVC5OB9qISh2XfkEFnZ6Nr6bMAKyEkCjExymhW_Syf7X23O2KFDUgd_wuFg1B7Bm2tV5q3Ao0GljyNA_E4Xj/s400/SPY+20+Size.png" width="400" /></a></div>
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While that is encouraging, one rule I generally follow is that when markets go to oversold levels on a weekly basis, I look to my Size indicator. General rule here is to stay with the trend until Size reverses. As can be seen here, Size is soaring and it may take some time for it to turn.</div>
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Another important indicator is the Stochastics. Here is the 20-week stochastic reading</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhie1sjUjQQXmuc6Acb9jHCxnUQI5UBG_BzLjLjfIMdIU2S-dtpTvhAjgcIpQOhZMSdB7SzJDihAPM8CdwoPgJPENSGTUFvtrt-qL-xeoJKe1GalHwB4XNn7dPKF433DaAtZSLN7EFsBMcA/s1600/spy+20+sto.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1035" data-original-width="1424" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhie1sjUjQQXmuc6Acb9jHCxnUQI5UBG_BzLjLjfIMdIU2S-dtpTvhAjgcIpQOhZMSdB7SzJDihAPM8CdwoPgJPENSGTUFvtrt-qL-xeoJKe1GalHwB4XNn7dPKF433DaAtZSLN7EFsBMcA/s400/spy+20+sto.png" width="400" /></a></div>
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Rule of thumb here is that one would hold off on buying until stochastics begin rising from oversold levels. Clearly we are headed down.</div>
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And while my Cycle indicator shows that we are at Cycle lows now, the cycle can work its way over many weeks/months before heading higher.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXkFn6bRhD6brqIpKm-ndPotU3C-xWS8Wb6yxGxIT17CJUPTlPH7wR3E9nGOIt7w4OzAiaIhvZYKLju63GRlC8iFFjBsDM8mxlbQWSVS1B-oXrGNhk1b_asF3nHnA7-eV8kWxVsCU1WR8E/s1600/SPY+Cycle.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="660" data-original-width="909" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXkFn6bRhD6brqIpKm-ndPotU3C-xWS8Wb6yxGxIT17CJUPTlPH7wR3E9nGOIt7w4OzAiaIhvZYKLju63GRlC8iFFjBsDM8mxlbQWSVS1B-oXrGNhk1b_asF3nHnA7-eV8kWxVsCU1WR8E/s400/SPY+Cycle.png" width="400" /></a></div>
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From a value perspective, I was adding SPY and some stock positions at the 250 week average. My philosophy here is that if you can buy at or below a long term moving average, at worst, at some point you will at least get "regression to the mean" should prices continue lower. </div>
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And while from my perspective, it was an appropriate opportunity for me to deploy some cash, one always has to consider that market wealth has been proven to come from proper asset allocation. Other factors such as market time, stock selection and other techniques fall short of the benefits of correct asset allocation. Another thought as markets gyrate is periodic rebalancing, enabling me to sell things at high levels and add money to areas that have underperformed.</div>
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Bonds, while soaring to dizzying heights, later experienced extreme volatility as well perhaps showing signs of lack of market liquidity. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbSPPdlw1CoRSoNITXBH2b2eukSpNPSxfjx9E3XRZH_-1tsvSC69EUN3WH0-I6aizx7is_IbyReYHg9saxhaI5u3ENBVSKx7m1_ev1k3-pkjK-54jP95AASepZmcwBs67WXT_lUqR-5Wem/s1600/TNX.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbSPPdlw1CoRSoNITXBH2b2eukSpNPSxfjx9E3XRZH_-1tsvSC69EUN3WH0-I6aizx7is_IbyReYHg9saxhaI5u3ENBVSKx7m1_ev1k3-pkjK-54jP95AASepZmcwBs67WXT_lUqR-5Wem/s400/TNX.png" width="400" /></a></div>
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While I normally look at TLT and use it in my positioning, I am posting here a shot of the 10 year interest rate. We can see that rates fell below a major support line and fell all the way to 0.66% before rebounding to 0.95%.</div>
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At the time rates were plummeting, seemed that the general thought that rates would go to 0. The Federal Reserve entered the picture adding boatloads of additional liquidity. While some commentary suggested that money was not going to create a vaccine for the current health threat, there may be other market stresses that are being ignored. Many factors are causing stresses to the dollar supply and there appears to be a dollar shortage. While don't have expertise in this area, my readings have shown that stresses in the oil market, as oil has sold off to $30 a barrel, have been one cause of concern. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyynzrm0RtAtlkqlE2sMNxN7_VBXcKS1NDA74li6LHvQi9teteAsV9VF-Wf2DwSAvF74KjUeOOVMAWVWdzKiygs5kE2CT_rFWluiYJay6i10tAF2CGF4OH0q37SVdDlxWwi3hsUYzGmawi/s1600/DXY.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyynzrm0RtAtlkqlE2sMNxN7_VBXcKS1NDA74li6LHvQi9teteAsV9VF-Wf2DwSAvF74KjUeOOVMAWVWdzKiygs5kE2CT_rFWluiYJay6i10tAF2CGF4OH0q37SVdDlxWwi3hsUYzGmawi/s400/DXY.png" width="400" /></a></div>
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The DXY chart shows a big surge of some 3% this past week in the dollar. But it's important to note that the long term trend is down and like the SPX in my last post, DXY is showing a similar three-week test of the highs, the failure leads to sell offs. With lower interest rates continuing and massive amounts of liquidity, in my mind, the dollar is worthless. Yet in the mix of world-wide fiat currencies, it is the "cleanest shirt in the laundry bag" so to speak. Yet, it remains troubling to go to cash as it appears that the Fed may be "monetizing debt." One would think that massive inflation is on the horizon. But how can we protect against this? I have no clue at this point.</div>
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I had, as many others, thought that gold would be the ultimate "safe haven." </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZHmoKyrdlngjXXDPccqlBjICYjt6hXpyADw9THJPLKkF5EqMBT_XCLtrIGrH0_KaeQduNH9eC-Qu0qTZVCzFeBotvPk9fsjafWHXPkGLcGS6HKIKrFFJKOV-HNeOMXbjg_RNvKI9zuRpm/s1600/GLD+price.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZHmoKyrdlngjXXDPccqlBjICYjt6hXpyADw9THJPLKkF5EqMBT_XCLtrIGrH0_KaeQduNH9eC-Qu0qTZVCzFeBotvPk9fsjafWHXPkGLcGS6HKIKrFFJKOV-HNeOMXbjg_RNvKI9zuRpm/s400/GLD+price.png" width="400" /></a></div>
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But like everything else, gold took a hit this week. The only positive is that it held the .318 retracement level.</div>
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One concern is that we appear to have completed a 5-wave up leg. It's clear to see from September 2018 to recently, 5 well defined waves, three up and two down. Many gold bears contend that this was merely part of a correction with gold destined to drop below 1,000. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqEMiNuFSvasPnWAJu1ji6ow1qNEQt4KmQ8YGac6akVulgWTHJNZ3-D2aqiqDOKo7_bCi8d_9ormrR1pFNmnsWku7TBgCS-lo-siyH726dFKjfzkPK3DHardcPSySSyRavWr-ncNL1_k96/s1600/GLD+cycle.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1032" data-original-width="1421" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqEMiNuFSvasPnWAJu1ji6ow1qNEQt4KmQ8YGac6akVulgWTHJNZ3-D2aqiqDOKo7_bCi8d_9ormrR1pFNmnsWku7TBgCS-lo-siyH726dFKjfzkPK3DHardcPSySSyRavWr-ncNL1_k96/s400/GLD+cycle.png" width="400" /></a></div>
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My Cycle chart offers no guidance other than that price is headed lower. There are no other examples of the steep falling off of a cliff that we see in this chart. One has to go with the Stochastics that are headed down in a more well-defined cycle.</div>
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As everything is going down, the general thought is deflation. That is the worst news for the Fed, governments and corporations as the key way to get out of debt is to inflate it away. This is not happening. One can expect the Fed to be pumping more and more money into the system. And while that should bode well for precious metals, there has been little logic to the metals market. </div>
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A big cause of this deflation is OIL!</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqfFe2C43i9qmwQb3ZXYdT4BhztPAvDLxQa-qbyvZpwHmc_BD8rw-BoRA9kWwlM6n_uHakm_CW7sYryKo1vLu24bNSDojrQNhXJoQqKo67J1zX8pRfLwjjZihYo4OLz13AXMQUSQC4LjaC/s1600/oil.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqfFe2C43i9qmwQb3ZXYdT4BhztPAvDLxQa-qbyvZpwHmc_BD8rw-BoRA9kWwlM6n_uHakm_CW7sYryKo1vLu24bNSDojrQNhXJoQqKo67J1zX8pRfLwjjZihYo4OLz13AXMQUSQC4LjaC/s400/oil.png" width="400" /></a></div>
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Oil prices dropped significantly as Russia and Saudi Arabia disagreed on production cuts. Some have commented that some intent might have been to try to destroy the US Shale Oil industry which relies on higher prices to survive. </div>
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Years ago, I had thought that the shale industry would be toast as they needed prices from $80 - $100 to survive. Yet news of massive debt defaults in the industry never crossed my desk. It had been mentioned that the industry gained efficiencies and in the end, Zombie, debt-ridden corporations can ride things out indefinitely when interest rates are near 0% and the government is intent on maintaining the industry. I have heard that President Trump is taking advantage of the low oil prices to fill up the strategic reserves. While I don't intend to be political, Kudos to the president for taking this action. I recall when President Bush was adding to the strategic reserves, it was when oil was at $140 a barrel. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj56KoJqPq5-1Kv08759dPB0dgpjkp63-89gpf7kArT76pUm4SJsVc_QF9SvmXOXahxLVfBl2cdnhq-0nYAcdgmsXydCAZgkD5iKceyhy6ZvWK1uDOaqEPdoktnJUQUKyark-92qJkzEkEp/s1600/XOI.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj56KoJqPq5-1Kv08759dPB0dgpjkp63-89gpf7kArT76pUm4SJsVc_QF9SvmXOXahxLVfBl2cdnhq-0nYAcdgmsXydCAZgkD5iKceyhy6ZvWK1uDOaqEPdoktnJUQUKyark-92qJkzEkEp/s400/XOI.png" width="400" /></a></div>
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Similarly, oil stocks have been "clubbed . . ." You probably know how the rest of that cliché goes.</div>
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I had been buying some oil stocks in this decline. Timing wasn't exactly spot on but seeing what I had considered to be quality companies going for well under what I had hoped to buy them at previously prompted me to take action. </div>
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When I ran a derivatives department years ago, I mandated that my traders NEVER short oil. Just too explosive a market to play with in my mind. For the long term, it seemed like a good value proposition. On the environmental front, I expect that companies will gravitate to clean energy as many have already been doing. I don't think that the oil industry will go away.</div>
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Finally, on my stocks list, I mentioned that only three stocks were up in my universe. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPvbOD0r2wZ75gwAiCeU2_hU4R57e5lcHtWi8nehRd8QyZuB8LPjHd512OFnWa_Cver_Bf_ugfsRrIKXU2V-8miGXyhNa76XMZ27xSIHk03ETA2bRGlHgb-lyxnuRxi1-662XcDiW2EySb/s1600/gainers.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="222" data-original-width="731" height="121" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPvbOD0r2wZ75gwAiCeU2_hU4R57e5lcHtWi8nehRd8QyZuB8LPjHd512OFnWa_Cver_Bf_ugfsRrIKXU2V-8miGXyhNa76XMZ27xSIHk03ETA2bRGlHgb-lyxnuRxi1-662XcDiW2EySb/s400/gainers.png" width="400" /></a></div>
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I took a look at UPS. Don't know the fundamentals but I assume cargo continues to fly.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRUTnFEAaHsJRAN16ii91bkr09X8FkRama9fAQ3kdt9cmPu1d-MdV1x3uaBk2nk9OA_KLxh8w2BRC89vVz70OfIC43VyJ-3LYwSBHSrs5dK_EVcVDF-jWZt33wofK6l24XEbjPq2AthyJk/s1600/UPS.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="616" data-original-width="1067" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRUTnFEAaHsJRAN16ii91bkr09X8FkRama9fAQ3kdt9cmPu1d-MdV1x3uaBk2nk9OA_KLxh8w2BRC89vVz70OfIC43VyJ-3LYwSBHSrs5dK_EVcVDF-jWZt33wofK6l24XEbjPq2AthyJk/s400/UPS.png" width="400" /></a></div>
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Looks to me that a bounce to the trendline could be possible. Beyond that, one has to see how this market shake-out proceeds. <br />
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It rebounded nicely on Friday rising nearly 10% to close the week out with a slight gain. Still at these levels, it appears to yield better than 4% on the dividend front. Suppose that trying to buy dividends is also dicey (I had bought some OXY last week - ouch!!) But what else can we do? I don't have any answers.<br />
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In the end, the key is to stay diversified. Again, our wealth is not accumulated due to market timing or stock selection, but asset allocation. I'll try to dig up my presentations on this and add it to the blog site. I'll also plan to add the risk assessment questionnaire to help you determine your risk, along with model portfolios based on your risk level.<br />
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-76949027975087451512020-02-02T11:26:00.000-06:002020-02-02T11:26:03.356-06:00Intermediate Top Alert<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK5-fLdv5_iGSDu3VqvtyJVxobJaWoXsl7h84kYvB7oQEHqEYaIPidRFT4TtkHSew_yqbBuWgWz4TB-cHWTbXnIjjMoY3YBJUZD1yr1veN_1fiaWQaYHWTj67KMs3bd3MujAd__YWijECm/s1600/SPX+signal.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK5-fLdv5_iGSDu3VqvtyJVxobJaWoXsl7h84kYvB7oQEHqEYaIPidRFT4TtkHSew_yqbBuWgWz4TB-cHWTbXnIjjMoY3YBJUZD1yr1veN_1fiaWQaYHWTj67KMs3bd3MujAd__YWijECm/s1600/SPX+signal.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="878" data-original-width="1600" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK5-fLdv5_iGSDu3VqvtyJVxobJaWoXsl7h84kYvB7oQEHqEYaIPidRFT4TtkHSew_yqbBuWgWz4TB-cHWTbXnIjjMoY3YBJUZD1yr1veN_1fiaWQaYHWTj67KMs3bd3MujAd__YWijECm/s400/SPX+signal.png" width="400" /></a></div>
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Stock markets fell last week as concerns over a new virus swept the globe. S&P 500 index fell nearly 70 points to close at 3,225.52.</div>
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Those who follow Elliott Wave counting have been looking for an end to the current wave up, so a down move has not surprised some. For others, fear that the market's current stretch is overdone, has caused concern.</div>
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As the chart shows, price has dropped down to break through the stop-loss marker generated by the Wilder's Parabolic indicator. a break below the stop loss indicator signals the investor to sell the position and reverse course, using a new stop indicator that begins to form stemming from the last high price. A closer examination of this chart <a href="https://www.tradingview.com/x/wcZJCvlo/" target="_blank">SPX Parabolic Chart</a> shows that in sideways markets, it could cause one to sell at the bottom only to rebuy at the top. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-8yISyqmnmZsklgWBrtfChk0fJvGX9PpFyhul6PPDjwuUX-sB8IszfnUWs3M1fhehZRmjwXTVe1EwI8Q3ky00SSUqPuQzKwL1cmDyHlyWO9L9ZfLPfBfV9UuIum-WMmLxxYfoGh29cusB/s1600/SPX+BB+Daily.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-8yISyqmnmZsklgWBrtfChk0fJvGX9PpFyhul6PPDjwuUX-sB8IszfnUWs3M1fhehZRmjwXTVe1EwI8Q3ky00SSUqPuQzKwL1cmDyHlyWO9L9ZfLPfBfV9UuIum-WMmLxxYfoGh29cusB/s1600/SPX+BB+Daily.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="877" data-original-width="1600" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-8yISyqmnmZsklgWBrtfChk0fJvGX9PpFyhul6PPDjwuUX-sB8IszfnUWs3M1fhehZRmjwXTVe1EwI8Q3ky00SSUqPuQzKwL1cmDyHlyWO9L9ZfLPfBfV9UuIum-WMmLxxYfoGh29cusB/s400/SPX+BB+Daily.png" width="400" /></a></div>
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Looking at the daily chart, with a Bollinger Band, one can see that price has reached the bottom of the band, for some, that could indicate an oversold level and a buy.</div>
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When I look at such a situation, I begin tracking the standard deviation which can be seen in this chart on the indicator BBW. This is the Bollinger Band Width. As the Bollinger Band width increases, it tells me that volatility is increasing and I want to stay with the trend.</div>
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We can also see that the other times that price has hit this lower level of the bands, it rebounded and stocks continued along on their merry way, ever higher. A difference that we may see now is that there has been real economic damage as a result of the virus. China is being sealed off as neighboring countries close borders and airlines cancel flights to China. The potential economic effects of the situation has not been lost on bonds which continue to rally towards the highs.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgp1rqdOavNt6wyOw1wERD24YMntlAyAX2p389lQL9U3QA9XYCx90hljHILSNBYvTekKG54UxlGosGuLk0M2ggpIPPGLrSOnRK8KMft2cl-zg38Ue1EdMiolQa7YN8eaKhONxP4b_Nuo7nA/s1600/TLT+week.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="878" data-original-width="1600" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgp1rqdOavNt6wyOw1wERD24YMntlAyAX2p389lQL9U3QA9XYCx90hljHILSNBYvTekKG54UxlGosGuLk0M2ggpIPPGLrSOnRK8KMft2cl-zg38Ue1EdMiolQa7YN8eaKhONxP4b_Nuo7nA/s400/TLT+week.png" width="400" /></a></div>
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Bonds have been rip-roaring for the past two weeks and appears to be headed much higher. That said, having a proper asset allocation in your investment portfolio should help you should stocks continue to fall.</div>
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Also, Gold has been a key performer.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ4sxPku-Dkgq-UPGYF93Fkniq_yz24pAIZazLIgkHr6RexbCAkmfYs19Ro1hNh3nKOPrP4jE1qnUTNbqi7Y95IdjzFvzF4beKk8E65oIVTqrJUsgJFd0APzzKy9_0TYIbPNiffTshg7og/s1600/Gold.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="877" data-original-width="1600" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ4sxPku-Dkgq-UPGYF93Fkniq_yz24pAIZazLIgkHr6RexbCAkmfYs19Ro1hNh3nKOPrP4jE1qnUTNbqi7Y95IdjzFvzF4beKk8E65oIVTqrJUsgJFd0APzzKy9_0TYIbPNiffTshg7og/s400/Gold.png" width="400" /></a></div>
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And while I have been touting Gold and Silver for awhile now, few have gotten on board neither participating in normal market accounts through exchange traded funds such as GLD and SLV, or through outright physical purchases. </div>
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Both bonds and precious metals have moved opposite of the market offering a balance in a diversified portfolio.</div>
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Lots more market action to come this next week. How you want to position yourself depends upon your overall outlook.</div>
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<a href="https://www.tradingview.com/chart/SPX/X7vGnk1N-SPX-Just-Playing-Around/" target="_blank">Very Long Term Outlook SPX</a> This link takes you to my TradingView market charts page. I encourage you to go there and follow my thoughts as we go through the market gyrations. In this long term outlook, with prices going back beyond 1929's great depression, one might see that the market outlook appears to be on track to advance for decades to come. </div>
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On the intermediate term however, the first SPX chart shows my expectations for the next week. Prices should rally to test the weekly highs. If we fail to exceed the highs, I expect that prices will fall back. How deep the correction will be is hard to say but from past experiences with such tests of the high, a failure usually brings about a significant decline. My first expectation is a move down to the 3100 level by March option expiration. I will be planning to purchase put option spreads, through March expiration, to capture this expected move. But as in the past, these setups have more often than not played out as events such as the Fed adding liquidity or the President pounding the table to buy have overshadowed normal expectations.</div>
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It's hard to imagine that the market will be able to get any traction on the downside, at least not until after the elections in November. But considering that many investigations into Trump, culminating with an Impeachment trial have yet to get Trump out of office, perhaps the only way would be to destroy the economy so prevent his reelection. </div>
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The president appears to be extremely vigilant though of this possibility and his immediate criticism of the Fed when they tried to raise rates shows that any actions by others to hurt the market are quickly addressed. While this time may be different, I expect that news that an antidote for the virus has been found and off to all time highs - again. </div>
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What do you think? It will be an interesting week in the markets for sure.</div>
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Be sure to visit my Trading View site at <a href="https://www.tradingview.com/u/Glewis54/" target="_blank">https://www.tradingview.com/u/Glewis54/</a></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-55884128003101058922018-03-27T18:53:00.001-06:002018-03-27T18:53:53.864-06:00More VolatilityAfter long periods of quiet market action, equity markets have come to life, providing newfound riches to active traders. After dropping 16.15 points (SPY) last week, closing the week at 258.05, stock markets soared on Monday, rising more than 7 points to 265.11 on to give much of that back today, with the market closing at 260.76.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPyLu0EeDvjdHm15d-F3S5ugjxGtgwjiesqE45NwrEw4WUFbuwjsyNhPUV7gHkDuC2CDFWu9V5SXEHt4Zg5DY2RqFCy-to9XvtY177w2E-K2-UKvhXkhKXghU36gaEf7Pn_ZgtcReER1O4/s1600/daily+chart.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1035" data-original-width="1424" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPyLu0EeDvjdHm15d-F3S5ugjxGtgwjiesqE45NwrEw4WUFbuwjsyNhPUV7gHkDuC2CDFWu9V5SXEHt4Zg5DY2RqFCy-to9XvtY177w2E-K2-UKvhXkhKXghU36gaEf7Pn_ZgtcReER1O4/s400/daily+chart.png" width="400" /> </a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPyLu0EeDvjdHm15d-F3S5ugjxGtgwjiesqE45NwrEw4WUFbuwjsyNhPUV7gHkDuC2CDFWu9V5SXEHt4Zg5DY2RqFCy-to9XvtY177w2E-K2-UKvhXkhKXghU36gaEf7Pn_ZgtcReER1O4/s1600/daily+chart.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"> </a></div>
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On a positive note, SPY continued to hold the 200 day average. For many, this is significant so if we break below, we could see a waterfall event bringing price down to around 250 and perhaps even lower.<br />
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More details as we progress during the week.<br />
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Another positive sign is a short term stochastics indicator. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjKca_a67wfHWv51c_yPa3wZWka9I08v4eX1PGWEKOm5Xp8F_iSX_vBqWyxWJsLMZs7mqLKQeKxHGnWhTD_l0p0jbJseIZDRg1NBg0mWnQGsDW5AlOMwTwky3L2JF7h5JC1brgMrzGyX_8S/s1600/daily+stochastics.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1035" data-original-width="1424" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjKca_a67wfHWv51c_yPa3wZWka9I08v4eX1PGWEKOm5Xp8F_iSX_vBqWyxWJsLMZs7mqLKQeKxHGnWhTD_l0p0jbJseIZDRg1NBg0mWnQGsDW5AlOMwTwky3L2JF7h5JC1brgMrzGyX_8S/s400/daily+stochastics.png" width="400" /></a></div>
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On the bright side, this indicator is starting to turn up. But it will need to go a bit higher before market players will take serious notice. Usually a break above 20 can bring in buyers.<br />
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Stochastics is an indicator that looks at the ranges of the highs and lows for a recent period of time and shows were the current closing price is in relation to that range. A rising indicator shows momentum building.<br />
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On the negative side of the equation, short term volatility is increasing.<br />
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When this SIZE indicator is increasing, you need to stay with the trend, which for the moment, is down. When this indicator reverses, it is often a good signal to enter the market as the strength of the trend is starting to diminish.<br />
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Overall though, I continue to look for opportunities to build a position in anticipation for a possible rally to the highs, as soon as next month!<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwPMhPdDLkGyHxdUyIN0jq85sbTgJDEQYOMA5TTshZIvwpCxhgBB_JL8NgIHYdn1A4dgwLY7P8ST_dRBqfoHbh1-ZfvZrw_2e9VSr6M2t5nDemadQfEwOPxodCrJVR-SJLpBlQMRPsJIdm/s1600/monthly+expectations.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1034" data-original-width="1424" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwPMhPdDLkGyHxdUyIN0jq85sbTgJDEQYOMA5TTshZIvwpCxhgBB_JL8NgIHYdn1A4dgwLY7P8ST_dRBqfoHbh1-ZfvZrw_2e9VSr6M2t5nDemadQfEwOPxodCrJVR-SJLpBlQMRPsJIdm/s400/monthly+expectations.png" width="400" /></a></div>
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The monthly chart shows how I expect this to play out. January marks the closing high point. February was lower and March is a good bet to close lower yet. But I expect that come the end of April, prices will try to move above January's high. If it does, we can expect the market to continue on to much higher levels. If we fail to make a new high, on the close, then I would be positioning for a decline, possibly very significant.<br />
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Currently, I have several positions working for me. As the market has been volatile, it has provided good opportunities to buy call options, for possible moves higher, and put options for possible moves lower. With the level of volatility we are experiencing, if one is paying attention to the squiggles of the market, it's possible to take positions at good prices, for both market directions. And the kicker is, no matter which direction the market moves, if volatility is high enough, one could profit. More on these details in the future.<br />
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Bottom line here, as SIZE is increasing, I expect lower prices in the near term but expect to test the highs next month.<br />
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-8100135056357624962018-03-25T08:49:00.001-06:002018-03-25T08:49:47.337-06:00Market Prices Fall<div class="separator" style="clear: both; text-align: center;">
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Markets fell sharply this week. SPY, an Exchange Traded Fund that mimics the SP 500 index, fell 16.24 points (-5.92% on the week).<br />
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While the downturn appeared severe, technically, the damage appears minimal so far with support coming in at the 40 week average, just as previous downdrafts did.<br />
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For trend buyers, buying at or below a chosen long term trend is a good strategy.<br />
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From a cycle perspective, the timing of this decline is similar to the previous decline. Not to say that the decline is over, but Size, my view of volatility over the past 20 week period, continues on a downtrend and is easing to the moving average. Further declines and an increase in this indicator would push me to reevaluate my current thinking, that we are at or close to the bottom of this wave.<br />
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On Thursday and Friday, I began purchasing call options. On Thursday, I purchased options with an early May time horizon, anticipating that SPY will make a three-month test of the recent highs. The test occurs at the end of April. Throughout this bull market, prices easily cut through the previous highs. Not saying that this is what I expect, but I am positioned for it. Should price meet with resistance and it fails to make new highs, at that point, it would be a good time to begin positioning for a downturn.<br />
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Analysis, that I will present at a later time, shows that the wave 5 can run for quite awhile, like longer than a year. More to come.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-47646250971108440972016-11-09T07:36:00.000-06:002016-11-09T07:36:16.282-06:00TRUMP WINSNow let's get back to work. For those who have been paying attention to the market, it's been a long, drawn-out, flat market. When President Barrack Obama met with Federal Reserve Chairman, Janet Yellen, some months ago, although no notes were taken ;-), it seemed pretty obvious that the message was 'don't rock the boat' until after the election.<br />
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The market called Trump's victory well before the electorate did. Equity Markets plunged limit down when I tuned in, around 1:30 am Central Time. Obviously, the market saw the impossible occurring. Within the next hour, the verdict was in.<br />
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Futures have since eased up and the "black swan" effect that many predicted, should Trump win, has not yet occurred. Precious metals continue to be up strong.<br />
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As reported months ago, there was no reason to be posting any further until after the election.<br />
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At long last, it is history. It's back to work now with new analysis. The Status Que is no more. Will Trump take the Federal Reserve out of the game and let the markets trade freely? Without back door play by the Central Banks to keep the markets propped up?<br />
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Good things to come if you are a trader. Perhaps the markets will go through their cycles and they are meant to. <br />
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New update and outlook ahead this weekend. Stay tuned.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4031027485015731131.post-68218131625268411962016-07-09T16:22:00.000-05:002016-07-09T16:51:42.630-05:00Jobs Data Delights All<b><span style="font-size: large;">STOCKS SURGE</span></b><br />
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The Bureau of Labor Statistics (BLS) reported employment gains far exceeding even the most bullish expectations Friday. Preliminary numbers indicate that payroll employment increased by 287,000 in June. US stocks climbed to highs on the news with the Standard and Poors 500 index closing at 2,129.90.<br />
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<b><span style="font-size: large;">BONDS SURGE</span></b><br />
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US Bonds surged to all time highs Friday on BLS reports that the number of unemployed individuals in the US increased by 347,000. The Unemployment Rate advanced 0.2% to 4.9%.<br />
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The 30 Year Bond Yield Index (TYX) closed at 21.10 (2.11%). Levels not seen before. Exchange Traded Fund (ETF) TLT, an easy way to trade bonds on the stock market, closed at an all time high of 143.60.<br />
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<b><span style="font-size: large;">PRECIOUS METALS HIT MULTI-YEAR HIGHS</span></b><br />
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Not to be left out of the party, precious metals, although they sold off initially when the employment news was released, quickly reversed and closed at multi-year highs.<br />
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SLV, one of the ways to trade silver on the stock market, ended the week at 19.22, up $0.48 or 2.6%.<br />
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All in all, most things did well with the exception of European and Latin American stocks and commodities (not including precious metals).<br />
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This all comes as no surprise. As mentioned last week, the jobs number didn't really matter. Central banks, unable to get any kind of inflation going, are desperate to stimulate the economies and continue to print more and more currencies in an effort to do so. It's not really working but the extra added juice sure does some good stuff to the markets.<br />
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For a few years now, I've been accumulating physical gold and silver even as I watched prices fall, seemingly forever. It's not easy for most people to look at physical things like precious metal bullion coins and not think of them in terms of their worth in dollars. The trick in the understanding is to realize that since 2008/2009, the Federal Reserve has increased the money they have created from around $800 billion to over $4 trillion, nearly a five time increase. Local banks, through the fractional reserve system, create additional multiples of this amount. When you understand how much new money has been created and then consider that there is absolutely nothing that backs this currency, a prudent person would be thinking "I've got to turn this worthless currency into a hard asset as soon as I can." <br />
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<b><span style="font-size: large;">A CHART TO THINK UPON</span></b><br />
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As I am always talking about gold and silver to people, the one thing I hear all the time is, what good is it? You can't eat it. They can't conceive that the US Dollar could be as vulnerable to devaluation as the Russian Ruble or the Mexican Peso. The truth is, any paper currency is only worth what others accept it to be worth. If a dollar crisis were to occur, something similar to what continues to be happening in Greece, one needs some form of money to transact daily business with. Who knows how it can or will play out.<br />
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Throughout much of civilization, silver has been used as a currency and perhaps someday, it will again. If it were today, and the stock market was priced in silver, this is how it would look.<br />
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So while the stock market may be going up and even making new all time highs, remember, when we are looking at price charts of the market, it is soaring based on purchases made with paper money that has no real value. It was created from nothing, with no assets backing it up and is being used in unlimited quantities to keep pushing stock prices higher. But the stock market, when priced in terms of something that has an intrinsic value, like silver, is in a Bear Market.<br />
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<b><span style="font-size: large;">BONDS (TLT) PRICED IN GOLD (GLD)</span></b><br />
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Looking at bonds in terms of gold, this is breaking down as well.<br />
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Don't let surging markets influence your buying decisions, Central Bankers can create the illusion they wish to create. If we do our homework, we can catch a glimpse of reality.<br />
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-4755481666895364742016-07-02T14:10:00.000-05:002016-07-02T14:46:31.072-05:00Markets Soar<div class="separator" style="clear: both; text-align: center;">
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Markets surged this week, quickly rebounding from last week's sudden melt-down after the UK populace voted to leave the European Union. While US markets fared well, with the Dow and SPX rising more than 3%, bigger gains came in most European shares. Latin America shares also outperformed.<br />
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The star of the week though was Silver, which soared 11% on the week. Silver also starred on the monthly returns list, rising 17%.<br />
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Notice the stellar year-to-date returns for Silver and silver and gold mining shares, Silver Wheaton (up 99.5% on the year) and Barrick Gold (up 200% on the year).<br />
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<b><span style="font-size: large;">STOCKS REBOUND</span></b><br />
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Surprise, surprise! Another V-shaped rebound. Just look at past attempts of the market to sell off. Each time, markets quickly rebounded and climbed back to the highs. It was clearly evident last week when after the Brexit vote, it was immediately announced that the ECB (Euopean Central Bank) would add 250 Billion Euros to shore up the system. I.e., more quantitative easing. Other central banks also added that they were at the ready to print more money. <br />
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I had recently provided a story about how the hacker group Anonymous had hacked into Federal Reeserve systems and found that the Fed owned more than 50% of many large US corporations. I have seen no additional news regarding this nor had Anonymous, to my knowledge, released the files that showed this. Yet it's not surprising that The US Federal Reserve would be buying stocks to "stabilize" the market. Other central banks have released information showing their US stock holdings so why wouldn't the US be in the lead on this? Even if the US Federal Reserve is not holding large stock positions, other Central Banks are and of course, they are too "SYSTEMATICALLY" important to allow their assets to fall. <br />
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Well, perhaps this game is over. And the sudden surge in SILVER could be the evidence.<br />
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<b><span style="font-size: large;">SILVER SURGES</span></b><br />
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The breakout in silver was as unexpected as ever. Many have suggested that the prices of gold and silver have been manipulated in the futures markets where institutions sell futures contracts to artificially suppress prices. This can be easily accomplished in the futures markets since seldom does delivery of the actual physical commodity occur. And, should anyone actually try to corner the market and buy more silver and gold than is available for delivery, the contracts may be settled in cash. As a result, the laws of supply and demand go out the window since supply can be created just like our paper money is created, with a key stroke. There is nothing real that supports it.<br />
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It will be interesting to see how far the silver rally can go. Many have felt that silver and gold prices were suppressed so that people would continue to have faith in the paper fiat currencies that we use. Surging metals prices would indicate that people are losing confidence in the fiat system <br />
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So where might silver go?<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwWXai0MhS19DW0ypX1YVMPFz7x_XkrSyIzcYgZLz3CFc1dDPp-cmePjM9ht5fX-Cx-_9rYqkBMq2oemlWPzTMoAwCIxPO7h3cLOqWVailis1fAloRuFDCiUBInA7xZDlQn6w7db04fvvV/s1600/Silver+week.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwWXai0MhS19DW0ypX1YVMPFz7x_XkrSyIzcYgZLz3CFc1dDPp-cmePjM9ht5fX-Cx-_9rYqkBMq2oemlWPzTMoAwCIxPO7h3cLOqWVailis1fAloRuFDCiUBInA7xZDlQn6w7db04fvvV/s400/Silver+week.jpg" width="400" /></a></div>
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This chart is a weekly chart of paper silver (SLV) if you wish to trade it. We can see the multi-year selloff after a big run-up. Included in this chart are Fibonacci retracement lines. After a move, traders often refer to these Fibonacci retracement levels to project where price might go. Common retracement levels are 38%, 50% and 62%. There could still be some decent trading profits to be made should these projections play out.<br />
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Then what? Some believe that prices will then fall back and even hit new lows. They believe that we will be experiencing a long period of deflation, similar to Japan, whose economy has stagnated for 20 years already. Others believe that the massive amounts of money printing that have occurred will cause hyperinflation. Perhaps we are already seeing signs of that in the food we buy. Hey, even prominent fast-food burger joints are using "sawdust" as filler in their burgers. Certainly my 1/2 gallons of ice cream are no longer 1/2 gallons and even my one pound package of hot dogs are now shrinking to 12 ounces, although the price remains the same as the one pound package (in better days).<br />
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The government cannot show that there is inflation as this would result in higher interest rates, higher social security payments, etc. With the US debt at $19 trillion, interest rate shocks would certainly cause a lot of pain for the government (and taxpayers).<br />
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The deflation story also used debt levels as a cause. We've all learned early on that when you borrow money to buy something today, you are borrowing from the future. In the future, you will have to pay back the loan. So with governments borrowing so heavily these days, we are consuming today what we would have in the future. Therefore, there will be little growth. Another cause for deflation is demographics. As the populations of many developed countries decline and the birth rates slow, spending cycles will decline. That makes sense. If we build enough houses to suit the baby boomers, when they die off, will there be enough people to sell these houses to? Not if the future generations are smaller than the previous ones. I think that this might be one of the reasons why the government is so pro-immigration, even if it is not done legally. We need more people here to be working and paying taxes to support the social security, medicare and other benefits to the elderly, who are living longer than ever.<br />
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Whatever happens, I believe that the massive amounts of money printing that have taken place over the years provide reason enough to be an aggressive buyer of precious metals.<br />
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<b><span style="font-size: large;">WHAT ABOUT STOCKS?</span></b><br />
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Looking at the totality of the market move since 2009, we can see that if markets are topping now, the Fibonnaci retracement levels show the potential for pretty good downside moves. Again, we are talking 38%, 50% and 62%. Such moves are unheard of for many people but these are normal market moves. Could it happen? Yes. Will it happen? ??? Someday.<br />
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While we have made a huge move, a move that has been largely supported by central banks around the globe printing more and more money in an attempt to make their economies more competitive. It is truly a house of cards. But even as I say that and continue to position myself for a major move down, it's possible that the game can continue with higher prices still. This past week, the European Central Bank indicated that it would continue to print even more money and buy securities in the European markets. Japan is all in on this and many suspect that even in the US, the next move by the Federal Reserve will be to lower interest rates and do more quantitative easing. Certainly this will catapult market prices even higher. Where else can the banks go with the money in a world of negative interest rates.<br />
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As mentioned last week, I was eying EWL, a Swiss stock fund, at 28. I bought it there and it nicely rebounded along with other European stocks.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2p6y8D6T9baaFbvqYDWgDDqBgS-7KHhI4ECmdJhVvxE8vqz1_Iy59HjxsNNwPMeu1hkAjCMRf4J34rsstbzMWe4AMZ4CWP2k8ZVYMjeug0L9JMYToL8BQOPgcgrfQE-dblJ4GRy4gsXtG/s1600/rds.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2p6y8D6T9baaFbvqYDWgDDqBgS-7KHhI4ECmdJhVvxE8vqz1_Iy59HjxsNNwPMeu1hkAjCMRf4J34rsstbzMWe4AMZ4CWP2k8ZVYMjeug0L9JMYToL8BQOPgcgrfQE-dblJ4GRy4gsXtG/s400/rds.gif" width="400" /></a></div>
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I also jumped on Royal Dutch Shell (RDS.B) Wanted to get a piece of the oil game. Both did well on the week.<br />
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Next week, we will get the jobs numbers on Friday. They tend to be meaningless. If they are weak, it will just support the current thought that interest rates will continue to go lower, even negative, in the near future. This will cause stocks, bonds and precious metals to continue rallying. Bad News is Good News. And even if the jobs numbers are good, the feeling is that the Federal Reserve will use the turmoil in Europe as a reason not to raise interest rates this year. <br />
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So might as well play the game for as long as it lasts. Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4031027485015731131.post-53990571708625795862016-06-25T17:15:00.000-05:002016-06-25T17:15:31.038-05:00OK, You Voted Your Desires, Now Get Back "In Line"Friday's dramatic market moves are totally baffling considering that the Brexit vote, which markets had been trading off of for days now, is really irrelevant. <br />
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It wasn't too long ago that the same thing happened in Greece. The people had a chance to break away from the bondage of the EU and ECB and voted for it. Now their punishment for disobedience has only increased. When will they ever learn?<br />
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I can't believe that the UK will ever have the opportunity to break away from the EU and the power behind the curtain. Consider that to even begin taking steps to move forward in this direction, it will have to wait for three months until David Cameron resigns as the UK PM and someone new comes in. THEN, they will have TWO YEARS to put things into motion. And then how much longer after that to establish the actual dissolution? I doubt if I will even be alive then to see it, should it actually occur.<br />
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In the end, the bankers always win. Even as the markets were being rattled, what was happening behind the scenes? Central bankers were nimbly creating billions and billions more of fiat currency to provide liquidity in the event of margin calls. And with interest rates very close to 0%, it's no problem to just go to the reservoir and borrow more free money to cover your losses. After all, even if the markets should continue crashing, it's almost a certainty that the famous V-shaped recovery will again come in to save the day. <br />
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So I can't see any real reason why the markets would crash, unless the powers behind the scenes Will It. The UK vote is Non-binding. It's just one of those "bones" us minions are thrown every now and then to appease us. Even here in the US, the recent Primary season let us know the truth. Voters don't nominate a candidate, the party does. <br />
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For the week, US stocks were down slightly and remain negative for the year. European stocks, generally represented with EAF, was down 5%. A closer look at country funds within the EU showed considerable damage to the weaker members, Italy and Spain. <br />
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Precious metals again rose but as I had mentioned in other social media outlets last week, Silver looked to be hitting resistance. I expect it to trade between 15 and 17 on SLV, offering some trading opportunities for those who have been accumulating positions at lower levels. As prices surged above 17 on Friday, I sold some 17.5 call options in July. Price couldn't hold the 17 level and fell back. <br />
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The 15-17 trade range is clearly seen here. Often, trading patterns are symmetrical. We can see that the SLV price traded between 17 and 15 from September to the following June, nine months. If we continue this pattern, it's possible to see silver trade sideways until early next year! <br />
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But with the printing of hundreds of billions more dollars and Euros, and the potential for QE 4 in the US, I'm only selling options on 10-15% of my total position. I will be aggressively adding more physical silver and SLV to my portfolio as we test the rising trend lines.<br />
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We can see the dramatic fall in price on Friday, and on big volume. We have to wait and see what happens starting Sunday night when the SP futures open up, along with foreign markets.<br />
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It could be that the rally from early February was just a rebound from the big move down that we saw at the end of the year and now we could be headed down further.<br />
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Many are predicting a big move down but I'm not so sure. The weekly chart shows that we just coiled sideways after rebounding from the Jan lows. Normally, this type of action is very bullish and I would buy the trendline. <br />
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I did sell some of my position in SDS (this is an Exchange Traded Fund that moves up 2% for each 1% that the SPX moves down). But I only sold about 20%.<br />
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I added to the "bearish" position on Wednesday when I read in ZeroHedge the reason why the odds on the Brexit vote changed so much.<br />
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It appeared that after one British politician was assassinated, the atmosphere about the UK leaving had changed and that Remain was taking charge. This was spotlighted with massive coverage of the Odds. Apparently, there is big time betting there on political outcomes. Suddenly the odds had changed, in favor of remain. Markets across the globe began rallying and the US market came within a heartbeat of new ALL TIME HIGHS! but a closer read into the ODDS which appeared to be driving the market showed that 75% of the bets made were for LEAVE while only 25% of the bets were for REMAIN! Those that were betting REMAIN were betting big! Big enough to considerably change the odds. But unfortunately, when it comes to voting, the vote of one rich man equals the vote of one regular guy (at least in theory). THOSE DOGS I exclaimed, they are rigging the markets by reshaping to odds. I immediately increased my Bearish position.<br />
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So I might do a little buying should the markets continue to tank next week. I was looking at some of these European Exchange Traded Funds (ETF). I get it that fundamentals have been deteriorating for years now. I think that the markets have every reason to go lower, even by 30% or more, and that wouldn't be abnormal.<br />
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I'm interested in EWL, the ETF that covers Switzerland.<br />
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I want to see if it holds this 80 month trendline at 28. It pays a 5.6% dividend.<br />
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We shall see how the markets play out in the coming weeks. On one hand, I see that any violent sell off will be quickly bid up. There's no doubt in my mind that Central Banks around the world are big owners of stocks in the US market. This has more or less made the US stock market TOO BIG TO FAIL. Central Banks just have too much skin in the game at this point. If the markets really fell to where they should be, currency systems around the world would become insolvent with only gold and silver benefitting.<br />
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So with that in mind, I'll be picking up bargains, if I see any. Good luck. Should be exciting times coming. But in the end, remember, it's all fiction. If the UK does leave, it won't happen for at least another 4 years.<br />
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Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4031027485015731131.post-597346488089960522016-06-11T07:06:00.002-05:002016-06-11T07:40:28.888-05:00Lower Rates Stop Working - What's Next?Stocks around the world declined this past week, led by European shares. US shares, despite joining in the sell-off on Friday, declined only slightly.<br />
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As mentioned last week, Silver was looking like it was ready to pop and sure enough, it did, rising more than 5% this week.<br />
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More European bond buying by the ECB appeared to be the stimulus for the sell-off. They will begin buying corporate bonds in a continuing effort to stimulate the economy.<br />
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In the past, more free money boosted stocks but over time, the effects have been less and less. This week, a typical European market looked like this:<br />
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More Central Bank meetings coming up next week, including one with the US Federal Reserve Bank. What can be said about that? Doesn't really matter what Janet Yellen says, computer trading programs react to any comment with buy programs boosting prices back up to the highs. Usually the volume is so light that it leaves many scratching their heads.<br />
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Don't have the precise info in front of me, but reports have shown that Hedge Funds and Major Banks have been net sellers for the past 18 weeks, yet US stocks continue to hover close to the highs. WHO'S BUYING? is the big question. Can't say that I actually know, but as mentioned last week, it had been reported that the group Anonymous hacked into the Federal Reserve trading accounts and found that it is the Fed that is accumulating massive positions in an effort to keep the markets up. Other reports have speculated that should European markets continue lower, the ECB will be buying stocks aggressively.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgiIb00vzDEYCguk89zeippk5UJg-2FQSvN2V__qK4VUpO2hRrOnYazntNa9ebT0dO_LKLJR9jKZSVf0aPwdssAuY9Iq4Rep8XftUTFpkMqv-Z0QYDHY7rgolQERXaZSI12jrR9SV9GL_Fw/s1600/draghi.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgiIb00vzDEYCguk89zeippk5UJg-2FQSvN2V__qK4VUpO2hRrOnYazntNa9ebT0dO_LKLJR9jKZSVf0aPwdssAuY9Iq4Rep8XftUTFpkMqv-Z0QYDHY7rgolQERXaZSI12jrR9SV9GL_Fw/s400/draghi.jpg" width="400" /></a></div>
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It's wonderful when you "have money to burn."<br />
<br />
We may never know until it's too late but if the Central Banks are truly buying stocks with money created out of thin air, can equities really have a value?<br />
<br />
It is a bit disturbing if one considers the consequences.<br />
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<br />
<b>CONTINUED LOW INTEREST RATES</b><br />
<b><br /></b>
There was a time when there was a correlation between interest rates and the stock market. I first started blogging about it in 2005 when rates started moving lower while the market moved higher.<br />
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It got pretty crazy there for awhile but then rates and the markets did come back together and in a hurry!<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxyjvggI8Zai1qhGfBw6TnfmYrJ-2NDw3wlh8WnFsFaONM0mF9w0QuMYlKxMMkppff9I_khlaqnD6Ao00FlEkdeil6dByNv_5fbwszD6SAe9kcdAauxpQeIgMsR7DHtxjTQsuUk85wgE64/s1600/SPX+tnx+past.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="283" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxyjvggI8Zai1qhGfBw6TnfmYrJ-2NDw3wlh8WnFsFaONM0mF9w0QuMYlKxMMkppff9I_khlaqnD6Ao00FlEkdeil6dByNv_5fbwszD6SAe9kcdAauxpQeIgMsR7DHtxjTQsuUk85wgE64/s400/SPX+tnx+past.gif" width="400" /></a></div>
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Isn't it interesting that the SP 500 dropped dramatically to match up with the interest rate? Notice the very strong correlation between the two until external forces began trying to repeal the market cycle.<br />
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"So where are we today?" you might ask.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimJ6KbGqteqAqOjHQEeIjvIKvpLcU2ph6yd5nlbj5rI3YnfiqCVGmZyEut5lVpw5lavEVe4w6FnQR5YMseKCNcQk3IASzSR0qwjcD-OD_4Ci_AmrBIcxvwKKo9_ka9KbgXhR7gN5cBuNyw/s1600/SPX+v+TNX+current.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimJ6KbGqteqAqOjHQEeIjvIKvpLcU2ph6yd5nlbj5rI3YnfiqCVGmZyEut5lVpw5lavEVe4w6FnQR5YMseKCNcQk3IASzSR0qwjcD-OD_4Ci_AmrBIcxvwKKo9_ka9KbgXhR7gN5cBuNyw/s400/SPX+v+TNX+current.gif" width="400" /></a></div>
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It certainly looks very "discomforting." Notice that rates are even lower now than when the market melted down in 2008-2009. <br />
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It seems to be understood that there will be "pain" when interest rates rise. How much pain is hard to say. Those who do not consider the fall out that will occur when rates do rise may suffer substantially.<br />
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While Central Banks fight the good fight to get things moving again, nothing really has seemed to work. Many who study the world demographics will attest to the fact that many important populations around the globe are aging and are not spending at high enough levels to stimulate the economy. Business formation continues to decline as increasing levels of regulation add to the cost burden of starting a business. Yet just sitting on low interest rates much longer will have horrible consequences. As we've seen recently, pension funds cannot operate in a zero interest rate world. I read that the Teamster's pension amounts will have to be lowered to just $35 for each year worked, meaning that a worker who had put in 30 years will only be getting $1,000 a month in pension benefits. Good luck with that! Insurance companies cannot honor their obligations either.<br />
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<br />
<b>INTERESTING TIMES AHEAD</b><br />
<br />
As mentioned, the Fed will be meeting this week and then next week, the long awaited Brexit vote. I can only ask, "what difference does it make?" Not long ago, Greece held a vote to escape the clutches of the European Union and voted to exit. What did the government do? Nothing.<br />
<br />
UK can vote to exit, but it won't matter. The game will play on until one morning we wake up with the news. GAME OVER!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-72653828627242826622016-06-04T11:00:00.001-05:002016-06-04T11:00:30.849-05:00The Charade ContinuesI marveled at the markets this past week or so as prices on the Standard and Poor's 500 and other major indexes JUST WON'T GO DOWN!! <br />
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It was almost humorous to see the big opening moves down each day over the past week and then see prices climb back for the rest of the day.<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizhKR29Og6Kv2kDaLb1l-pKrpDcISsfwjTN_s9abxxT3fYKMIhqZjOIO8ZTdv1GDWGMw1YKSP1CLMoKF9kLofiY02P9klHnxyGKgEiDPwPWqp2uQ3QT67YIwblCe_WSMspAcyZngV3mNQ9/s1600/spy+hour.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizhKR29Og6Kv2kDaLb1l-pKrpDcISsfwjTN_s9abxxT3fYKMIhqZjOIO8ZTdv1GDWGMw1YKSP1CLMoKF9kLofiY02P9klHnxyGKgEiDPwPWqp2uQ3QT67YIwblCe_WSMspAcyZngV3mNQ9/s400/spy+hour.gif" width="400" /></a></div>
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While I don't know for sure, it was reported last week that Anonymous hacked into the Federal Reserve trading accounts and discovered that the Fed owns more than 50% of many major corporations. <br />
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<a href="https://www.superstation95.com/index.php/world/1384">https://www.superstation95.com/index.php/world/1384</a><br />
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Would anyone really be surprised? I mean people who watch and study the market closely, not the average guy. Most of us who have been involved in markets for 30 years or more see that nothing works anymore. No level of technical or fundamental analysis works. The markets reflect the activities of the central banks, to include the Federal Reserve's Plunge Protection Team (PPT) and their crony's the High Frequency Traders. Many believe that Citadel is actually a pseudo-extension of the Federal Reserve. And the game extends to our national elected officials who not too long ago rejected a bill that would prohibit them from buying stocks on the knowledge they have (i.e., insider trading). For sure, why would they cook the golden goose?<br />
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So for my part, I have maintained a position in SDS and have more or less ignored it for quite awhile now. We are back to the low points where I had done my last accumulations but have chosen to buy no more. It is my contention that the Federal Reserve and their agents will keep the markets up at least until the election in November. This seemed to have been confirmed when US President Barack Obama met privately with Federal Reserve Chairman Janet Yellen. Of course no notes were taken of the meeting. One can only guess what the President and Chairman might be discussing. <br />
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<strong>WHERE DO WE TURN?</strong><br />
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Well, all is not lost. A review of the markets to date shows the following:<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEge4GtVJc5r0qN6-cveybZhRsFN5C-cQHXryiN-LQkHak1V8pRPCsW9Q_p9ysLn-VUmdPuAmfLvrb2mcQkmtkwVwzeRzCPiWHPM5IjQa7gK21D8D38BDEO07CYLmnMbJsVcksj0L0aeBtPR/s1600/table.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="237" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEge4GtVJc5r0qN6-cveybZhRsFN5C-cQHXryiN-LQkHak1V8pRPCsW9Q_p9ysLn-VUmdPuAmfLvrb2mcQkmtkwVwzeRzCPiWHPM5IjQa7gK21D8D38BDEO07CYLmnMbJsVcksj0L0aeBtPR/s400/table.png" width="400" /></a></div>
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It's clear to see that Silver and Gold have been the standouts this year. And of course, it only makes sense with world central banks continuing to print more money to monetize debt. I recall reading that some $10 trillion in sovereign debt now carries negative interest rates. How unfortunate it is for us minions that we can't take on more debt and get paid for doing it. It would be like being promised free gasoline if you buy a new car. Imagine.<br />
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So paper currency is really worthless. After all interest rates do reflect the cost of money and there is no cost. Think about that when you are slaving away at your job and for what? You get paid in worthless fiat currency. What a delusion. So for a few years now, I have been mindlessly buying physical gold and silver. I do so with pleasure as I can't wait to unload the worthless fiat currency. I have thoroughly brainwashed myself in this truth. If I believe it, then it must be true, right?<br />
<br />
Well I do have something solid that for the millennia has held value. And I do love the idea that these precious metals were forged in the fires of some exploding super nova gazillions of years ago. Also that all of the gold that was ever mined is still in existence today. Who knows who could have handled some of the gold? Perhaps Alexander the Great or Jesus? Who can say? It lasts forever.<br />
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So I could continue on about the value of hard assets that include real estate as well, but living in Illinois and even worse, Cook County, both virtually bankrupt entities, property taxes can and will grow to the sky to the point that the governments will eventually seize all properties due to tax delinquencies. Imagine that, the Fed will own all the mortgages and the governments will be fighting for the title. Anyway, I digress.<br />
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I do favor silver at this point and here are some charts to justify my thoughts.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjE2B5K0bE_HI-JUtDH_XrQULueyW9Msx39oIac-MlZZcmxx6nscTOt7NGjqy5Fk6EHOWZ_AEpEXZqOzS2srHaot2Rpg6xW0wp-0hUmpHFfMZ8JGyQT_kY9Kvo7a-t0oyTYaoF2kP2FWhcM/s1600/SLV.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjE2B5K0bE_HI-JUtDH_XrQULueyW9Msx39oIac-MlZZcmxx6nscTOt7NGjqy5Fk6EHOWZ_AEpEXZqOzS2srHaot2Rpg6xW0wp-0hUmpHFfMZ8JGyQT_kY9Kvo7a-t0oyTYaoF2kP2FWhcM/s400/SLV.png" width="400" /></a></div>
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This chart shows the Exchange Traded Fund that reflects the value of silver. The price here is a little less than the actual physical silver because, well let's face it, this price reflects a digital entry or paper certificate. Theoretically, there is supposed to be the actual commodity backing it, theoretically. So it costs less than the actual stuff you can put in your pocket. And rightfully so. Gee, am I feeling cynical this morning?<br />
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It does appear that we have had a nice bounce after several years of downward movement. Keep in mind that real buyers of precious metals feel that price is irrelevant since paper money has no intrinsic value at all. Anyway, for those who do like to buy low and sell high, Silver has made a strong move up and the 20 week moving average is now trending higher. The trend is your friend.<br />
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<strong>GOLD SILVER RATIO</strong><br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiciN_HFXSdm7keXmLm37er_p89VCSRs8m-zgMvbngrN_sBvuuRIWUDQJSlr4aSd79Ht_6Ys7INWPiBvY0aaMcdcnkz5X4awZuPYVui6Ti46UcqBrR-8LHi3c1d7lcFRaAu5oXOGpTSHkc2/s1600/goldsilver.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiciN_HFXSdm7keXmLm37er_p89VCSRs8m-zgMvbngrN_sBvuuRIWUDQJSlr4aSd79Ht_6Ys7INWPiBvY0aaMcdcnkz5X4awZuPYVui6Ti46UcqBrR-8LHi3c1d7lcFRaAu5oXOGpTSHkc2/s400/goldsilver.png" width="400" /></a></div>
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For a long time now, for as bad as gold has been, silver has been even worse! The chart above shows the gold/silver ratio. Gold has been almost 80 times more valuable than silver! This is extremely abnormal since silver and gold are mined together with a ratio of 15 ounces of silver to one ounce of gold. By recent historical levels, one would expect a gold/silver ratio of about 30. It got up to 80!<br />
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The chart shows that this ratio has broken down some and rebounded, but only to the moving average. Let's see if it continues breaking down, as it should.<br />
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<strong>SP500/SILVER RATIO</strong><br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5v8zDM4Pl8NTG1GrjOL_0Te7T7PWd72XUrPRKhbwjK9a0vpKBRv1HRIvcXHfwGC_GqckKDCl7DuyUWRtgXFlKZDPcD8JmjeSjnKl1CWtUhxeB7eE9M4qHwOpZ42xijvWvQlzMIKvnJAmS/s1600/Spysilver.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5v8zDM4Pl8NTG1GrjOL_0Te7T7PWd72XUrPRKhbwjK9a0vpKBRv1HRIvcXHfwGC_GqckKDCl7DuyUWRtgXFlKZDPcD8JmjeSjnKl1CWtUhxeB7eE9M4qHwOpZ42xijvWvQlzMIKvnJAmS/s400/Spysilver.png" width="400" /></a></div>
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This chart too is starting to break down meaning that silver is starting to outperform stocks. This is a no brainer as we saw in the table that silver is up 18% on the year while stocks are just managing to keep their heads above water.<br />
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Could be that silver will continue to be the big winner, besting both stocks and gold.<br />
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A word of caution though, if you do buy physical precious metals, be sure to keep them close at hand and not in a bank safety deposit box. If currencies do collapse (think of Venezuela, Argentina, Greece, Cyrus, etc.) you will not be able to get into the bank to access your valuables. <br />
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Bottom Line: I'm curious to see if I'm right and the markets do stay up until the election. This would go to prove just how rigged the system really is.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4031027485015731131.post-37647393368296880952016-05-07T10:09:00.001-05:002016-05-07T10:09:20.740-05:00Three Week Test of High Next Week<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPPJxUM4zbCzFSHQSfCG3g5QjxQtDueQ2MLe5e3caMZjwj5Tyxnk9UN6kJyO80Zgr-zR_zfkvc8BaFTBeSxwnaRKJXpMxnx6Q3NiNzIwpmplgQZPQILX-3drbSaMU3EGR3Nw6Ovl_aPNGa/s1600/week.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPPJxUM4zbCzFSHQSfCG3g5QjxQtDueQ2MLe5e3caMZjwj5Tyxnk9UN6kJyO80Zgr-zR_zfkvc8BaFTBeSxwnaRKJXpMxnx6Q3NiNzIwpmplgQZPQILX-3drbSaMU3EGR3Nw6Ovl_aPNGa/s400/week.png" width="400" /></a></div>
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<br />
As expected, markets closed down again for the second week in a row, setting up an anticipated topping formation, a three week test of the recent highs.<br />
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Should we fail this test of the high, expect some Central Bank to come out and goose the markets again.<br />
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They'll do everything that they can to keep it going until the system collapses.<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibaMZVsECxqNvZLxntxLALkg_PPSNQDtoowiKzhfTNoA1j3-yw2W1ecR-NmbGg0Kz9nFYweJh8ACD1TTRUQ6WpYqcvoWytC0wE0lNStUmy5m3OjEQ9sfU5vcq-R570_op_yeRy0i6Y94qX/s1600/table.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibaMZVsECxqNvZLxntxLALkg_PPSNQDtoowiKzhfTNoA1j3-yw2W1ecR-NmbGg0Kz9nFYweJh8ACD1TTRUQ6WpYqcvoWytC0wE0lNStUmy5m3OjEQ9sfU5vcq-R570_op_yeRy0i6Y94qX/s1600/table.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="237" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibaMZVsECxqNvZLxntxLALkg_PPSNQDtoowiKzhfTNoA1j3-yw2W1ecR-NmbGg0Kz9nFYweJh8ACD1TTRUQ6WpYqcvoWytC0wE0lNStUmy5m3OjEQ9sfU5vcq-R570_op_yeRy0i6Y94qX/s400/table.png" width="400" /></a><br />
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<br />
<br />
<br />
As the table shows, it appears that the world might be in line with this thought. Silver and gold continue to be the big winners on the year. Can you guess why?<br />
<br />
The move to the precious metals is the obvious conclusion in the world of manipulated paper assets.<br />
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4031027485015731131.post-39167751271512846602016-04-17T06:16:00.002-05:002016-04-17T06:16:24.515-05:00Resistance Is Futile<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUsjgqOTec-44bInE7zw84meGgvg_YpRybidr0Guej1kxM0rgAjup3qQgfgcR93awBo0DZeaGLkfI0FWWFUIbfUH84mbmHa7JAX3HZhWWQsrwh487yXFVzUBUtVpeNZaFAqA-sTEK0BcB-/s1600/week.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUsjgqOTec-44bInE7zw84meGgvg_YpRybidr0Guej1kxM0rgAjup3qQgfgcR93awBo0DZeaGLkfI0FWWFUIbfUH84mbmHa7JAX3HZhWWQsrwh487yXFVzUBUtVpeNZaFAqA-sTEK0BcB-/s400/week.png" width="400" /></a></div>
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<br />
The market moved ever higher this week, breaking through, what was expected to be, the final line of resistance. <br />
<br />
Volume continues to decline and my technical indicators also show that technical momentum is not there to support higher prices.<br />
<br />
Assuming that nothing goes up forever, I'll continue holding my SDS position (two time inverse S&P 500). Fortunately, my accounts are being saved by long positions in gold, silver and gold stocks. The rise in these assets seem to verify the continuation of easy money in the markets and the increased potential for a much lower dollar and inflation.<br />
<br />
In the end, you can't fight the Fed. And just this past week, Fed Chairman Yellen met with President Obama and Vice President Biden. What they discussed was not revealed. Other Central Bankers were on the move, meeting in high level meetings. Lots of news that has not been accentuated: Puerto Rico debt, Austria Bank debt, big banks failing to provide workable living wills.<br />
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Lots of potentially disturbing news out there but the market rally has gone on far too long, despite lots of negative news in between. In the end, if the Fed wants the markets to go up, they will go up, no matter what. It's my guess that the markets will maintain at least until November.<br />
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Seeing how I already shot my bullets claiming a top, and now have been proven wrong, I will work on other more rewarding activities. I expect this will be my last post for the year unless something interesting develops.<br />
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Unknownnoreply@blogger.com0