Gold & Precious Metals
Critical period for gold. The $1,350 area (Point A) was once key support and now is key resistance (Plus 50-Day M.A in that area-point B). Two closes above it and we can say the market has indeed turned- but not before!
Friday’s monthly employment # almost always has a gold bomb around it so its a big week for gold to to do more than just hold its own. The Crimenex is once again trying to take back the gains made after its close late Friday.
Things
- America’s economic, social, political and spiritual slide deepens. Sadly, the vast majority are totally unprepared for what’s still to come.
- The next Detroit?
- Are the iron-ore bears wrong?
- What the *^%#@? Are you kidding me?
ABOUT PETER GRANDICH
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.
His abilities has resulted in hundreds of media interviews including GMA, Neil Cavuto’s Your World on Fox News, The Kudlow Report on CNBC, Wall Street Journal, Barron’s, Financial Post, Globe and Mail, US News & World Report, New York Times, Business Week, MarketWatch, Business News Network and dozens more. He’s spoken at investment conferences around the globe, edited numerous investment newsletters, and is one of the more sought after commentators.
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 30 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.
Grandich’s autobiography, Confessions of a Wall Street Whiz Kid, was publiched in fall 2011.
He is the also the founder of Trinity Financial Sports & Entertainment Management Co. [www.TrinityFSEM.com], a firm with a Christian perspective which he started in 2001 with former NY Giant and two-time Super Bowl champion Lee Rouson. The firm offers services to celebrities, athletes and average folks. Peter Grandich is a member of the National Association of Christian Financial Consultants, and a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.
Grandich is also very active in Christian sports ministries including the Fellowship of Christian Athletes and Athletes in Action.
He resides in New Jersey with his wife Mary and daughter Tara.
DOW – 37 on 1200 net declines
NASDAQ COMP – 14 on 850 net declines
SHORT TERM TREND Bearish (change)
INTERMEDIATE TERM TREND Bearish
STOCKS: There was most likely some worry about the news this was week which is going to be heavy. We get 2nd quarter GDP, FOMC minutes and non farm payrolls so we had a light volume day with a downside bias in spite of strength in Europe.
GOLD: Gold inched up again, this time up $7.
CHART: For months we were bullish because of strong internals. Well, now the internals have weakened. The S&P 500 made a marginal low below a previous low while the advance decline line made a more substantial declining bottoms pattern (arrow).
TORONTO EXCHANGE: Toronto rose 21.
S&P\TSX Venture Comp: The Venture Comp was lower by 1.
BONDS: Bonds were lower on Monday.
THE REST: The dollar stabilized. Silver, copper and crude were all marginally lower.
BOTTOM LINE:
Our intermediate term systems are on a sell signal as of June 4, 2013.
System 2 traders Are in cash. Stay there on Tuesday.
System 7 traders Are in cash. Stay there on Tuesday.
Stock investors We are long Intel from 21.61 with a stop at 22.50.
NEWS AND FUNDAMENTALS:
Pending home sales dropped 0.4%, but not as bad as the expected drop of 1.4%. The Dallas Fed. Mfg. Survey came in at 4.4, less than the expected 6.4. On Tuesday we get the Case Shiller home price index and consumer confidence.
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We’re on a buy for bonds as of July 11.
We’re on a sell for the dollar and a buy for the euro as of July 10.
We’re on a buy for gold as of July 11.
We’re on a buy for silver as of July 11.
We’re on a sell for crude oil as of July 26.
We’re on a buy for copper as of July 1.
We’re on a buy for the Toronto Stock exchange TSX as of July 11.
We are on a sell for the S&P\TSX Venture Comp. as of Jan. 29.
We are long term bullish for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.
INDICATOR PARAMETERS
Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( Below .80 is a negative. Above 1.00 is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative).
No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.
A theme of ours has been to avoid stocks located in the BRIC nations (Brazil, Russia, India, China) as the economic gains and rewards tend not to flow down to the shareholders of publicly-traded investments.
These economies are also impacted by dramatic and somewhat draconian fiscal and monetary policies which can create “red herrings” in order to draw in unsuspecting foreign investors.
This time last year, China, which was worried about a slowing economy, opened up the liquidity floodgates and expanded credit by a whopping 40% from the summer to the later autumn!
Sure enough, this provided enough temporary financial adrenaline which sucked in investors far and wide. In fact, eight months ago, Bank of America Merrill Lynch surveyed global money managers and 67% expected a stronger Chinese economy in response to the growth triggered by the increase in credit.
Now, that credit growth has been arrested (because of inflationary and real estate bubble concerns) and the economy immediately slowed down. Bank of America Merrill Lynch just re-did the survey. Now, 65% of the global money managers surveyed expect the Chinese economy to weaken. Note to global money managers: You’ve just been punked! BRIC investing is usually not what it seems.
DJ Ind 15521.97 -36.86
Nasdaq 3599.14 -14.03
TSX 12669.04 +21.14
TSX-V 924.69 -0.60
TSX-Gold 186.69 -1.46
London Au 1329.75 -1.25
$Cad/Usd 0.974 +0.001
What You Need to Know Mark Jasayko MBA, CFA, Portfolio Manager
Markets – Weekly Notes: July 29
The World According to Ben Bernanke: A week ago Ben Bernanke testified over two days before Congress and took pains to convince us that no one really knows about investing in gold and what the price of gold should be. This sort of preaching has been his style when he is trying to counter thoughts and beliefs that are opposed to his or when responding to challenges against the policies that he deploys. The reality, based on gold’s investment characteristics, is that investing in gold is a bet against the success of experimental monetary policies. A rising price for gold represents a bet against Ben Bernanke.
Gold has risen more than fourfold since bottoming out in 1999. It isn’t four times tastier, or four times more brilliant, or produces four times as much income as it did before. It still looks and feels the same and still produces no income. It is only a barometer of the confidence or the lack of confidence with respect the potential and actual devaluation of the U.S. dollar, something over which the Fed has great impact.
Bernanke also went on to lecture us about worrying about the size of the Fed’s balance sheet (which contains mortgage bonds, Treasury bonds, and some toxic investments purchased in exchange for newly printed money). The balance sheet is already incredibly bloated by historical standards, and it continues to grow. Bernanke suggested that it will be a good thing when the balance sheet grows at a slower pace. This is a bit like an unhealthy overweight individual saying that they will be in better shape when their consumption of Big Macs slows down a bit. But this doesn’t do much with respect to reducing serious illness. In the case of the Fed balance sheet, slowing the pace of money-printing/bond-buying doesn’t do much with respect to reducing future inflationary problems and economic imbalances.
Bernanke claims that a bloated Fed Balance sheet is not a problem and that the market should give him some credit when its growth is expected to stop sometime next year (only a promise at this stage). Sounds like he is trying to sell us easy excuses instead of doing the needed hard work. And suggesting that we shouldn’t bet against him by investing in gold.
Best regards,
Mark
Consistently Working in our Clients’ Best Interest
The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.
Richardson GMP Limited, Member Canadian Investor Protection Fund.
Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.
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