Timing & trends
1. Cash Will Be Abolished. Here’s Why …
by Larry Edelson
“when governments’ backs are up against the wall, they act like caged animals, lashing out at anything and anyone that restricts their ability to stay alive”….continue reading HERE
2. A Tradable Low in Commodities
by Bob Moriarty
“We are absolutely going to have a tradable low in gold, silver and the vast majority of other commodities. They could go lower but we have everything in place for a tradable low. My opinion and it’s only my opinion is that we are going to have a barnburner of a rally across the commodity spectrum.” …..continue reading HERE
3. Top 6 Myths Driving Oil Prices Down
by OilPrice.com
Earlier in the year I documented half a dozen media reports which turned out to be 100 percent false. Now I expose another half dozen in just the past few weeks..” …..continue reading HERE for a list of the latest “lies”
The precious metals complex has attempted to stabilize over the past few weeks. Some markets have had more success than others. Gold has been able to hold $1080/oz while GDXJ has also held its recent low. The large cap indices (GDX, XAU, HUI) have grinded lower to new bear market lows this week. This leads us to the near term predicament. Is the sector basing before a rebound or merely consolidating before another steep leg down?
Gold will certainly give us the answer and it could come within a few days. While Gold has held support at $1080/oz it has yet to break above $1100/oz. A daily close above $1100/oz would likely lead to $1140/oz whereas a daily close below $1080/oz could lead to a decline down to major support around $1000/oz. We should note that the current net speculative position in Gold is the lowest in 14 years at 3.4% of open interest or ~15K contracts. I would not be surprised to see speculators eventually become net short Gold.
Gold & Gold CoT
Gold is not quite as oversold as the gold miners which have been beaten and bludgeoned to death. GDXJ and GDX, charted below, show black candles in each of the past seven weeks and in GDX’s case eleven of the past twelve weeks. The miners are extremely oversold based on any and every metric and period. Note the price action over the past few weeks. The miners have failed to rally but have not closed near the lows of the week. That suggests waning selling pressure or accumulation. A rebound could begin at any moment.
GDXJ & GDX
It would be quite interesting to see what happens to the miners if Gold were to break below $1080/oz and decline towards $1000/oz. Given that the miners are already extremely oversold (and in their worst bear market ever), it is quite possible they begin to rebound before Gold reaches support at $1000/oz. In addition, if this is the way Gold breaks (lower rather than higher) then it is also quite possible that the bear market ends after that decline. That would be sooner than everyone expects.
The near term remains uncertain but we could get clarity on Friday. In any case, the precious metals sector is due for a rebound. Failure to rebound in the days ahead tells us that we could ultimately see an even greater and more significant rebound from lower levels. As we navigate the end of this bear market,consider learning more about our premium service including our favorite junior miners which we expect to outperform in the second half of 2015.
Jordan Roy-Byrne, CMT
Richard Russell: “There are two items that bother me: One, the S&P has had 7 distribution days recently, and two, Apple stock is in full correction mode, down 14% from its recent high, and now below its 200-day moving average. Apple stock is widely held by mutual funds and hedge funds, and its capitalization is so huge that the stock can move markets.”
Time For A Full-Fledged Bear Market? – read more HERE
Bloomberg just posted an analysis of the recent correction in media stocks (Another major pillar of the bull market is collapsing) that contains some surprising, occasionally amazing stats. Consider:
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The 15-company S&P 500 Media Index has posted annualized returns of more than 33% since 2009. Prior to Tuesday, these stocks had risen 531%, from an aggregate market cap of $135 billion in March 2009 to about $650 billion.
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This index has fallen by 11% in the past two days, led by Disney and Viacom, which are down 12% and 18% respectively. Five stocks — Disney, Time Warner, Fox, CBS and Comcast — lost almost $65 billion of value in two days.
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Many of these companies are reporting lower sales while propping up their earnings per share with stock buybacks. Investors are finally seeing through the con.
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One analyst observes that “An argument can be made that [the media bust] is an indicator of consumer sentiment, because that’s where media revenues come from.”
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Now an already thin market — where most stocks were down while the major indexes were making new highs — has virtually no support. “More than 100 percent of this year’s increase in the S&P 500 is attributable to two sectors, health-care and retail, the tightest clustering for an advancing year since at least 2000.”
Among the many interesting things about the rise and fall of the old media stocks is that these companies were supposed to be the victims of technology. Everyone is replacing cable services with Netflix and Hulu, while movies, being digital files, are supposed to go the way of records and books, easy to make and download and therefore increasingly hard to sell at a profit.
But there they were, dominating the market. If this was a fluke — i.e., the last gasp of an industry about to be swamped by digitization — then it’s hard to know what these guys are really worth.
And with heath care and retail all that remain to prop up the market, it’s hard to know where the overall bottom might be.
…also:
Here Comes The Next Trillion-Dollar Bailout
For a larger version of this infographic, click here.
Predicting the future isn’t easy. For example, in 1977 it was predicted by Ken Olsen, a well-known tech entrepreneur at the time, that “There is no reason for any individual to have a computer in his home.”
It was not only an inaccurate prediction, but decades later the exact opposite has happened. Billions of computers now fit in our homes and our pockets. Even refrigerators, thermostats, and alarm clocks are armed with computers that connect to us as the Internet of Things grows exponentially.
As a result, we should take any forward-looking guesses with an open mind and a light heart.
In this visualization, Envisioning.io looks at the historical relationship between currencies and technology. The graphic also looks forward to the future of trade, where new applications of technology may change and expand the ways our financial system works.
Importantly, the visualization also makes the distinction between the different types of networks that encompass currency and trade. Centralized networks are where nodes connect through dense centres that support the connected few, such as governments and banks. Decentralized networks are where nodes connect in clusters under no centralized authority. These networks favour the selective individual and give rise to things such as stock markets. Lastly, there is the distinction of distributed networks, where network nodes connect independently. This is what has enabled bitcoin and cryptocurrencies, where the whole of the network is reinforced and supported.
There are several topics covered here that we have looked at in the past in much more depth. Most recently, we showed the opportunity in mobile and electronic payments, the evolution of US currency, and also how cryptocurrencies could disrupt the financial system. We’ve also covered precious metals in depth with our goldand silver series.
Original graphic by: Envisioning
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