Stocks – Bull –

It stands alone tonight, but the Dow Industrials broke out to a new 33 month high at 12,450.93. A noticeable laggard is the broad-based Russell 2000, but the broad-based Wilshire 5000 is also within striking distance of a new high. The rally comes as expected this week and with the breakout in the Dow Industrials I am more inclined to believe that any pullback next week will be temporary ahead of new highs in most (if not all) of the major indexes. Seasonals are still overall positive for the market this time of year, despite the call for ‘Sell May and Go Away’ now being widely touted (I believe today on CNBC whose real name is the Contrary National Broadcasting Company), so the market may continue to fool the bears who cannot believe we’re still in a bull market. If you believe there is a reverse ‘head and shoulders’ pattern in the Dow Industrials, we can ‘measure’ theoretically up to 13,300 as the next BIG, BIG upside target. Interesting times.

Gold – Bull –
Markets generally tend to points of irrationality and the for the bears who have not jumped on the bullish bandwagon, this time is very frustrating (if not angering) for them. I’ve been dead right on this market for nearly ten years and I hope to be for another ten years and the clarion call is BULL! As always, I take it one day at a time, but there are still higher technical targets and, of course, big unfulfilled upside targets which I’ve often written about herein. Investors who are patient can buy at anytime so long as they buy on a regular basis and hold on to the physical positions. Traders have the dilemma of timing an entry point and generally have to wait for intra-day or multi-day corrections. Still thinking we can see Silver hit $100 an ounce and Gold hit $3500 an ounce in the next few years. Seasonality says we can remain strong well into May and maybe then experience a shakeout. Stay tuned. Don’t forget to me on the Nightly Business Report this Thursday evening!

Bonds – Bearish – On the sidelines awaiting an opportunity to position on the short (inverse index) side. Current tape action is suggesting we may indeed see a greater rally try first (lower interest rates before higher interest rates).

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Andre Julian: Wheat Will Suffer

Mike Norman: here of HardAssetsInvestor with the second part of my interview with Andre Julian, who is the senior market strategist at OpVest Wealth Management.

So the last time you were here, Andre, we had a discussion about silver. Silver has been on fire. It’s been amazing. But you were bullish on it at the time. I think it was about a year ago. But you didn’t think it was going to overtake gold in terms of its performance. Are you surprised? You should be, because that was not your outlook.

Andre Julian, senior market strategist, OpVest Wealth Management (Julian): Yes. I’m really surprised. I thought gold would be the leader. And I thought that silver was just going to kind of tag along as maybe gold’s younger brother. And it overtook it. If you look at the money that’s going into silver, it’s moved a lot faster than gold has. It’s moved 70 percent last year, and it’s still continuing to move.

Norman: To me, that looks like just a mania. Because I guess you could make an argument for gold. People talk about it as sort of a quasi-money. And they talk about the Fed and QE2. And traditionally, historically, whenever there is inflation fear, you look at gold. But this rush into silver, this recent stampede into it, don’t you think it’s a little bit overdone at this point?

Julian: They have been saying that gold has been overdone for 10 years. And it continues to climb. So I started looking at silver a little bit more closely, and I think that you have your typical answer, which is, “Hey, it’s a fight against inflation. And it’s a fight against the devaluating dollar.” And that’s kind of where the discussion ends with a lot of people.

But when you really look at it, I think, again, you have to look at what’s happening with the currencies, look at what’s happening globally, with the fiat currencies. They’re really losing their standing. The president of China came out about a month ago and said that he thinks the dollar has lost its status as the world reserve.

Norman: But meanwhile, reserve holdings of dollars have gone up in the last year. And actually, since the crisis, reserve holdings of U.S. dollars around the world, at Central Bank, have gone up. It’s a greater proportion than it was even prior to the crisis. So that might be a statement designed to be politically targeted in some way. I don’t think it holds any credence right now.

Julian: Well again, the reason I brought that up was because he comes out and says that, and you’re right, I don’t think it means a lot, because really, if you look at his currency, if you look at the RMB, what’s it backed by? Well, it’s backed by a basket of other currencies. But the U.S. currency is backed by gold. Still about 60 percent of it is backed by gold. If you look at the major …

Norman: Gold?

Julian: Yes, by gold. Not backed by it, but the holdings against currencies. Holdings against currencies are actually about 60 percent in gold.

Norman: Well, our currency is nonconvertible.

Julian: No, it’s not officially backed by gold, but our holdings in gold. Basically, our holdings in gold are in proportion to our currency, which is about 60 percent. And if you look at China, it’s about 2 percent. And that’s a huge difference. So China has a penchant for buying gold, because they want to have strength beyond just their currency, currency strength beyond just a basket of other currencies.

Norman: So you’re saying that the silver move is going to continue because it’s tied in with this whole “inflation fear, devaluation/debasement of the currency” argument?
Julian: Well I think that, typically, people buy gold when they’re nervous, and people buy copper when the world is exploding and when it’s booming. And people buy silver when they’re uncertain. I think there’s a lot of uncertainty right now.

….read more HERE

Chart Below is Wheat Monthly

Is Canadian Farmland the Best Investment of All?

(I alluded here earlier to a class of investable assets with the potential to grow in value more spectacularly, even, than gold or silver. In the guest commentary below, my friend Tom McCafferty, a commodity trader and author of numerous books, makes the case for Canadian farmland as the best place to sock away money for your grandchildren. Obviously, this would require more capital than you might sink into precious metals or stocks. But, as Tom puts it, if you’ve got “a couple of million” to spare, this is arguably a very good place to bury it. RA)

If you’re worried about the economy your children, grandchildren and even your great grandchildren will inherit, there is an investment that has the potential to help all three generations.  It should even be rewarding in your life-time as well.

I’m talking about Canadian farmland.  Not the beautiful mountains along the coasts, but the real, dirt farming, i.e. wheat, corn, oats, sunflowers, soybeans, sorghum, barley, etc., in the center of the country.  But first things first:  Why Canada?

• Global Warming—no matter whether it is caused by carbon dioxide or natural time cycles, the growing seasons in the higher climates is getting longer.  The yield of prime exporting crops, such as corn and soybeans, are getting better as faster than the climate is rising.

• Water—Canada has plenty, unlike India and China.  And it is clean water.  Ever wonder why China put so much effort into controlling Tibet?  The five major rivers that supply water to China originate in little old Tibet.  When you read that China is importing more and more soybeans, they are actually importing water.  And water, unlike oil, cannot be economically moved—imported or exported—from one country to another.  It can only be used where it is.  In the years to come, he who has water rules.

……read more HERE

Precious Metals –  I awoke this morning to hear my wife tell me gold was over $1,500 and silver $44+. How do I feel about this? You can count on one or two hands at the most, the number of people who have remained credibly bullish from almost the lows of both metals. Yours truly will do a rare thing by patting his own back. It was not easy and it seemed those of us who did had to always defend our position all the way up versus those who were constantly wrong having to explain how they keep getting it wrong.

In a world where “what have you done for me lately” reigns, I will enjoy my hard fought gains in gold and silver through the holiday and speak more in-depth about gold and silver after. I do believe we’re getting close to a period that may see a significant correction/consolidation and hope to discuss this and more after the celebration of the Resurrection.

U.S. Stock Market – I said on Monday not to be surprised to see the market recover from the S & P downgrade news and as usual, the “Don’t Worry, Be Happy” crowd on Wall Street (and TOUT-TV) didn’t disappoint. Numerous emailers wrote urging me to finally remove my chicken feathers and short the market as the downgrade news had to be the death of the rally.

I remain in my chicken coop despite knowing this financial-heroin-driven market is going to end badly. Today and tomorrow just don’t seem to be the day to fly the coop.

U.S. Dollar – This song best describes the long-term future of this terminally-ill currency.

U.S. Bonds – The defying gravity act continues but Newton’s law shall one day rule again.

Oil and Gas – The Middle East factor continues to evolve and should remain an underlying major support for oil prices. The “Happy” crowd on Wall Street may discount oil’s impact but the average consumer has felt it right in the pocketbook. It will be interesting to see how they spin this into a good thing.

Natural gas remains in the early stage of a new bull market but, as noted previously, it should be a slow but steady progress theme as a very long base is built.

About Peter Grandich of Grandich.com

Though he never finished high school, Peter Grandich entered Wall Street in the mid-1980s with no formal education or training and within three years was appointed Vice President of Investment Strategy for a leading New York Stock Exchange member firm. He would go on to hold positions as a Market Strategist, portfolio manager for four hedgefunds and a mutual fund that bared his name.

Grandich is the founder of Grandich.com and Grandich Publications, LLC, and is editor of The Grandich Letter which was first published in 1984. On his internationally-followed blog, he comments daily about the world’s economies and financial markets and posts his views on social and political topics.  He also blogs about a variety of timely subjects of general interest and interweaves his unique brand of humor and every-man “Grandichism” expressions with his experience gained from more than 25 years in and around Wall Street. The result is an insightful and intuitive look at business, finances and the world, set in a vernacular that just about anyone can understand. In his first year, Grandich’s wildly-popular blog had more than one million views. Grandich also provides a variety of services to publicly-held corporations on a compensation basis.