TOM HUDSON: Stocks and metal prices continue climbing, despite nervous investors and that`s a good sign according to tonight`s “Market Monitor.” Mark Leibovit back with us, chief market strategist at vrtrader.com, author of the new book entitled “The Trader`s Book of Volume.” He joins us tonight from Troy, Michigan. Mark, welcome back, great to see you again.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Always a pleasure to be here, Tom, thank you.
HUDSON: So why do you think that some nervous investors is going to help push prices higher from here?
LEIBOVIT: Well, it`s called the wall of worry. Look, this past Monday where the S&P comes out threatening to downgrade U.S. debt. Dow was down 200 and then here we go yesterday, it`s a new closing, I believe today as well a new closing, (INAUDIBLE) market high. Just the function of bad news and the market choosing to ignore it, but generally when are you in an uptrend and get these shakes along the way, it just confirms the trend. And plus we have higher projections. Plus we have Ben Bernanke who is accommodative to the stock market who actually has said he is targeting a higher stock market. If you step back and look at any chart, weekly, monthly, daily, it is clearly an uptrend. So the trend is your friend. Stick with the trend.
HUDSON: So with that in mind here, volume though, some have been calling volume lighter than normal. You follow volume. What do you make of it?
LEIBOVIT: Volume is just fine. Basically it`s relative volume. You`re comparing one day to the next. Overall volume has still been relatively heavy. I don`t see anything in volume that has changed, at least the analysis that we do, more proprietary volume reversal and all the indicators that we follow in the traders` book of volume also confirm the trend as well.
HUDSON: Speaking of the trend, let`s take a look at your model for the Dow Jones Industrial Average through the middle of this year. This model here is anticipating a pretty nice rally from here through the end of June. What makes you bullish?
LEIBOVIT: Well, you know, the model is called a sharp sell-off. Remember this is published in January, called for a sharp sell-off right into mid-March which was a perfect call and basically it is trending up here into early summer. There is the expression sell in May, go away. In Canada they say buy when it snows, sell when it goes. Basically this is where we are at and maybe we will run into a little bit of a swoon in the summer, but beyond that, I still see a higher market but we are giving you a short-term picture here.
HUDSON: And how about for gold, we mentioned $1500, pierced that level today finally at the close. Looks for a slight climb through the summer before a bit of weakness into June. Is that weakness going to stick around?
LEIBOVIT: No, this is another cyclical swoon, so to speak, a pullback. Let`s see what kind of volume patterns come in and let`s see how high we are by June. If gold is $2,000 in the next two months, then we are probably due for one heck of a correction from some higher levels.
HUDSON: Are you going to call $2,000? Is your call $2,000 by the end of June?
LEIBOVIT: No, I would say we have a chance you could see $1650 the way it`s moving now. That`s a possibility. But we record interviews here (INAUDIBLE) for years that we`re looking for 3,000 plus. I have revised it up to about $3600 now. So that is a multiyear comment.
HUDSON: And it`s not just gold in the precious metals space. You also like silver. Here we`re going to look at the ETF, SLV, the ticker symbol, $45 an ounce. And you think this could hit triple digits?
LEIBOVIT: I think we`re looking at $100 in silver in the next couple to five years. And we`ve been looking, listen, look at it now. It is basically just catching up to where it was in 1980 which was $50 an ounce. Of course SLV trades at a discount to the actual spot metal so could see SLV very well near triple digits by the time this silver moves over and then gold by then like I say, could be $3600.
HUDSON: Last fall is when you were here in September 24th. We`re going to take a look at all four of your picks which have done very, very well. IAU, the gold, trust ETF up 16 percent. The central fund of Canada which is gold and silver up 50 percent. You also like Palladium, another metal, up almost 61 percent and the total stock market index up 18 percent. You still like these four?
LEIBOVIT: Absolutely. Stick with them. Trending the stock market is up, the BTI is a total stock market index. That`s like holding every stock in the stock market. Palladium is an industrial play just like platinum. Of course the silver and gold, I`m on record there and we might as well just hold what is working as the trend is up in all four.
HUDSON: Any ownership positions with these four, Mark?
LEIBOVIT: I own and trade every one of these. I love the metals.
HUDSON: It`s Mark Leibovit, the trend has been his friend, no doubt. He is with vrtrader.com
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Commentary above from Mark Leibovit, TIMER DIGEST’s #1 Intermediate Market Timer for the 10-year period ending in 2007, the #2 Intermediate Market Timer for the 10-year period ending in 2009, AND the #3 Gold Timer for the Ten Year Period ending 12/31/10. Subscribe to the VRTrader Newsletter.