Timing & trends

Where Have We Seen This Before…..

A Tale of Two Charts: 2007 America or 2006 Zimbabwe?

The US equity markets are back in record territory, at least in nominal terms.

The last two times they spiked this way, the following year was pretty brutal. See the next chart, which tracks the S&P 500 and margin debt, the amount of money investors are borrowing against their shares of stock to buy more stock. The chart seems to show that when investors are optimistic enough to use leverage to invest in already-risky stocks, then the good times have pretty much run their course and something nasty is imminent. If recent history is our guide, it is now time to either take some money off the table or short the hell out of the big indexes – or whatever else you like to do when the market looks overbought.

Margin-debt-oct-13

….read more HERE

Greenspan: Stocks Are ‘Relatively Low’ & Headed Upward

UnknownFormer Federal Reserve Chairman Alan Greenspan said the stock market has room to rise from record levels.

“In a sense, we are actually at relatively low stock prices,” Greenspan, who guided the central bank for more than 18 years, said in an interview with Sara Eisen on Bloomberg Television today. “So-called equity premiums are still at a very high level, and that means that the momentum of the market is still ultimately up.”

Greenspan said the stock market is “just barely above 2007” and the average annual increase in stock prices “throughout the postwar period” is 7 percent, which leaves room for a rise.

“Price-earnings ratios are not hugely up,” he said. The market has “gone up a huge amount, but it’s not bubbly,” according to Greenspan.

Ed Note: Mike Shedlock has put together a thorough analysis of Alan Greenspans forcasting record. Here is a short summary:

Succinct Historical Synopsis

 

  • In 1973 Greenspan said “There is no reason to be anything but bullish now” – The market topped that month, then crashed
  • In 1996 Greenspan warned of “Irrational exuberance” – The market, fueled by Greenspan’s incompetent actions roared for four years
  • In 1999 Greenspan was extremely worried about Y2K – The programming rollout on January 1, 2000 was exceptionally smooth
  • In 2000 Greenspan fully embraced the internet productivity miracle – The dotcom bust soon began
  • In 2001 Fed minutes show Greenspan was worried about inflation – A month later the Fed was fighting deflation
  • In 2006 Greenspan said “Housing Prices Won’t Fall Nationally” – Prices peaked summer of 2005, then crashed over the next seven years

Today Greenspan Says 

  • “In a sense, we are actually at relatively low stock prices”
  • “The momentum of the market is still ultimately up.”
  • “The market has gone up a huge amount, but it’s not bubbly.”

The full analysis can be read HERE

 

Gold, Silver & Miners Are Trapped

The precious metal market has been stuck in a strong down trend since 2012. But the recent chart, volume and technical analysis is starting to show some signs that a bottom may have already taken place.

This report focused on the weekly and monthly charts which allow us to see the bigger picture of where the precious metals sector stands in terms of its trend.

Let’s take a look at a few charts below for a quick overview, but if you want more interesting ones visit: https://stockcharts.com/public/1992897

Gold Spot Price – Weekly Chart

This chart clearly shows the trends which gold has gone through in the last three years. With simple technical analysis trend lines, clearly price is nearing a significant apex which will result in a strong breakout in either direction.

Remember, this is the weekly chart, so we could still have another month or three of sideways chatter to work through. But a breakout in either direction will trigger a large move.

goldtrend

Silver Spot Price – Weekly Chart

Silver is also stuck in a similar pattern.  Currently the odds still favors lower prices and for the upper resistance trend line to reject price and send it lower. But if we keep out eye on the leading indicators like gold miners, we may be able to catch a breakout or traded the rejection of resistance in the next month or so.

silvertrend

Gold Mining Stock ETF – Monthly Chart

Gold miners have a very sloppy looking chart. Price is extremely volatile and the recent price action in 2013 could go either way VERY quickly. I have a gut feeling GDX in the coming months could have a washout bottom and tag the $20 price level. While I hope I am wrong for many investors sake, if it does happen, it will be a very strong investment level to accumulate a position.

gdxtrend

Precious Metals Bigger Picture Outlook:

In short, I remain neutral – bearish for this sector.  In the next 1-3 months we are likely to see some strong price action which will be great. We need a breakout or bottoming pattern to form before we get involved at this level.

I know everyone is dying to get involved in precious metals again for another huge rally… but sometimes it’s just best to wait for the big picture chart to catch up with your bias before taking a position of size.

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This entry was posted on Thursday, October 24th, 2013 at 2:56 pm and is filed under blogETF Trading NewsletterGold BullionGold bullion forecastGold ETF AnalysisGold Forecastinggold forecasting serviceGold NewsletterHow To Trade GoldsilverSilver AnalysisSilver ETF Analysis. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

 

Switzerland’s Gold Exports Zoom

Four of the largest gold refineries on earth are located in Switzerland, being Metalor, Pamp, Argor-Heraeus and Valcambi. It’s estimated 70 % of the world’s refining is done near the Alps, therefor massive amounts of gold are distributed here; Switzerland has imported 808 tons of gold in the third quarter of 2013, and exported 680 tons in this period. Year to date import is 2420 tons, and export 2184 tons. Switzerland has never exported this much gold in 9 months, or in 12 months, the yearly total estimate is 2912 tons. I dare to say more than 1100 tons of this will hit the Chinese shores, wether it be Hong Kong or any other port.

Switzerland Gold Trade 2013-Q3

We know Hong Kong has net imported, in between January and August, 598 tons from Switzerland. Much of this is sent forward to Shanghai, but the Chinese are also importing directly from the Swiss. We know this from SGE physical deliveries and from Alex Stanczyk, Chief Market Strategist at Anglo Far-East Bullion, who I interviewed a couple of months ago. He told me China imports a lot that’s not going through Hong Kong (or through the SGE!).  

Our firm has got personal experience dealing with the guys that transport the gold, the security companies. One of our partners had lunch in the recent past with the head of the largest global operations company in security transport. He said there is a lot of gold that they’re moving into China that’s not going through exchanges. If the gold is for the government they don’t have to declare where it’s going. They don’t have to declare where it’s going in, or where it’s heading. If you look at the way the Chinese do things, why would they tell?   

Given the fact the Gold/Silver ratio is 59 currently, silver data from the Swiss looks a bit pathetic, but for all you silver bugs I made a chart! In the third quarter of this year the Swiss imported 545 tons of silver and exported 608 tons. Year to date import is 1328 tons, export 1653 tons. 

Switzerland Silver Trade 2013-Q3

Why Things Are About To Get A Whole Lot More Interesting.

Screen Shot 2013-10-24 at 1.40.59 PMUnlike Anything We Have Ever Seen Before

As I have discussed, we are about to witness a major change in the development of international oil, gas, and power generation.

This will involve a massive expansion of unconventional shale gas and tight (usually also called shale) oil production worldwide, along with substantial moves in infrastructure, electrical production and grid networking.

For all of this, cross-border movements quite unlike anything we have ever witnessed will be required.

As such, I recommended six interrelated elements that will be essential in the development of a game-changing approach to energy production and dissemination.

This shift will require:

(1) The identification, prioritization, and availability of technical innovation;

(2) An overall approach to predicting and containing costs;

(3) Attention to the adverse impacts on everyday life from the increasing exploitation of unconventional oil and gas – environmental, local/regional, and economic, market and labor dislocation problems;

(4) Planning flexibility to allow a wider selection of service providers, expertise, equipment, and technique applied to projects internationally, with an emphasis on developing in-country sources of technology, equipment and training worldwide;

(5) Development and application of new models for project finance; and

(6) Comprehensive regulatory and risk management approaches to merge government, private sector and social needs and objectives.

I also spent some time during the briefing and in the private discussions over dinner outlining how all of this could be done. The key is developing a seamless way to integrate the many factors within the six elements above.

This will require early attention to what is needed in countries around the world and identifying who is likely to provide the solutions.

And it is here that we are going to obtain an early indication of the companies, approaches, and breakthroughs that are likely to provide major profits for investors. In fact, what I intend to do here is expand the stage on which individual investors normally operate.

In the future, we will be going global.   

To make this happen, there will have to be a primary venue for the planning, identification, coordination and application in the energy sector as needed.

It just so happens that I’m involved in that as well.

In May, as many of you may recall, I was appointed Executive Chair of the Global Energy Symposium (GES).

This ground breaking new effort will bring noted international energy figures together to conduct ongoing analysis and priority identification, along with providing policy recommendations to governments, international agencies, corporations, environmentalists, and social groups.

This effort is so critical that I will be leaving my university appointments to head up this international group. But don’t worry, the way average individuals will profit from this will still continue on right here in OEI and in my specialized investment subscriptions through Money Map.

As we get closer to its first major international conclave in April of next year, you are going to hear a lot more about the GES. But one thing is certain: You are about to get an inside view on some of the most important energy changes in a generation.

Already, the London session has had an immediate impact on wider circles of interest. So over the next several weeks, you are coming along as Marina and I talk to other high-powered groups in Rio de Janeiro, Moscow, and a series of very private meetings at our second home in the Bahamas.

The international energy picture is changing fast and we are going to be right in the center of it.