In October of 2007, Bob Hoye of Institutional Advisors was on Money Talks when he made it very clear, crystal clear to get out of the markets. He said a credit tsunami was about to absolutely overwhelm us.. Obviously a very, very valuable call. He also declared publicly to get back into the market at the end of the 1st quarter of ’09. That’s why I’m really pleased to get his perspective. – Michael Campbell
Bob Hoye’s Top 3 Market Themes
Bond Market Top
“I’m the bond market is going to be heading south. On the ten year note we got upside exhaustion readings, which means the best is in. The dynamics are there for an important top in bond prices and they are about to head down. “
“In the last few months has been the only game in town and there’s been a lot of speculation. Still, there’s no shortage of supply of bonds from that crazy White house administration. I think this is the move where the bond vigilantes come in and say “No Mr. Treasury you’re not going to flog any more of these bonds to the market.” I’m looking for a real serious convulsion in the bond market.”
Gold & Gold/Silver Ratio
“Another indicator we find reliable is the gold silver ratio. It has a tendency when it turns up to signal a wave of credit concerns. The gold silver ratio is now about 65, if it goes right through 68 we’ll say watch out, we’ve got a liquidity problem coming.“
So one trade you can do is the gold-Silver ratio. If it breaks through 68, it might run to 75. In the crash in ’08 it got out to 84. Also while you can sell some of your gold stocks, we’re always interested in the junior exploration stocks. You can’t move around too quickly so you can hedge yourself with the new junior-gold-stock ETF symbol GDSJ in the states. One of the other ways would be to most certainly sell your silver stocks and also play the short side on silver stocks. It will make you some money and protect your core positions and gold.
The Stock Market
There was a very good top for the US stock markets in April and May. Through the summer it’s just been a sort of a choppy market favoring slightly the down side but then we typically get a nice rally going into the turn from August to September and it’s happening. We had a good day Friday and this is likely to continue into next week but this is just the seasonal sort of little lift in the markets that will be followed by further decline.
For the Entire Article & the background to the positions above read more HERE