S&P 500
2001.57
+2.59 +0.13%
Dow Indu
17156.85
+24.88 +0.15%
Nasdaq
4560.51
+7.75 +0.17%
Crude Oil
92.63
-0.57 -0.61%
Gold
1222.350
-15.095 -1.22%
Euro
1.285785
-0.009445 -0.73%
US Dollar
84.640
-0.086 -0.11%
Weak

Sentiment Shifting for Gold Bugs

From a post on the HUI at the site last week:

“There are worse things that could happen than filling a gap and scattering the wrong kind of gold bugs back out.  Then it would be up to the longer-term charts to do the heavy lifting if the daily does fulfill this downside potential.”

The gap was filled, the top end of the anticipated support zone was reached and indeed, the wrong [i.e. momentum players] kind of gold bugs are scattering back out.  The hard sell down on Thursday was very likely due in large part to the selling by traders with a fetish about gold as a geopolitical or terror hedge.

We should continue to tune out these people and while we are at it, tune out the ‘Indian wedding season’ and ‘China demand’ pumpers in favor of real fundamentals like gold’s relationship to commodities and the stock market, the Banking sector’s relationship to the broad market, Junk Bond to Quality credit spreads and US Treasury bond yield relationships.

It’s boring stuff compared to all that demand in China, Modi’s pro-gold regime in India and of course how we are all going to go down the drain amidst war, terror and an age of global conflict unless we have a ‘crisis hedge’.  The only terror gold investors should care about is that perpetrated upon paper/digital currencies by global policy makers.

So last week was good in that it blew out those who were hanging on through the 2 month long grind that did indeed turn out to be short-term topping patterns.  I don’t mind telling you that my patience was tested by the bullish spirits, especially on up days with Ukraine in the headlines.  I did not think it would take 2 months to resolve, but every time the sector looked like it would crack, a new geopolitical flashpoint would show up in the mainstream financial media.

That condition is now being closed out.  Taking its place could be a bottom of at least short-term significance (i.e. to a bounce).  We have a fundamental backdrop that is not fully formed and a big picture technical backdrop that has degraded in gold and silver and is not proven in the equities.  So whether we bounce only, go bullish for an extended rally or even bull market, or (and it’s still on the table folks) fail into the ‘final plunge’ scenario, we are dealing in potentials, not confirmed trends.

Moving on let’s check sector sentiment.

st.au.optix

The current hook down in gold’s Optix (Sentimentrader.com’s aggregated Public Opinion data) is correcting recent surges in optimism.  This is coming amidst a small positive trend.  ‘Uh oh, dumb money is getting positive!’ think contrarians anxiously.  But the historical view shows that the Optix rises in the initial stages of a bull market. [Read more...]

How is Doug Casey Preparing for a Crisis Worse than 2008?

By Doug Casey, Chairman

He and His Fellow Millionaires Are Getting Back to Basics

Trillions of dollars of debt, a bond bubble on the verge of bursting and economic distortions that make it difficult for investors to know what is going on behind the curtain have created what author Doug Casey calls a crisis economy. But he is not one to be beaten down. He is planning to make the most of this coming financial disaster by buying equities with real value—silver, gold, uranium, even coal. And, in this interview with The Mining Report, he shares his formula for determining which of the 1,500 "so-called mining stocks" on the TSX actually have value.

The Mining Report: This year's Casey Research Summit is titled "Thriving in a Crisis Economy." What is the most pressing crisis for investors today?

Doug Casey: We are exiting the eye of the giant financial hurricane that we entered in 2007, and we're going into its trailing edge. It's going to be much more severe, different and longer lasting than what we saw in 2008 and 2009. Investors should be preparing for some really stormy weather by the end of this year, certainly in 2015.

TMR: The 2008 stock market embodied a great deal of volatility. Now, the indexes seem to be rising steadily. Why do you think we are headed for something worse again?

DC: The U.S. created trillions of dollars to fight the financial crisis of 2008 and 2009. Most of those dollars are still sitting in the banking system and aren't in the economy. Some have found their way into the stock markets and the bond markets, creating a stock bubble and a bond superbubble. The higher stocks and bonds go, the harder they're going to fall.

TMR: When Streetwise President Karen Roche interviewed you last year, you predicted a devastating crash. Are we getting closer to that crash? What are the signs that a bond bubble is about to burst? [Read more...]

Miners' Cost Cutting Set to Deliver in Late 2014

The Gold Report: The gold price can't seem to climb back above $1,300/ounce ($1,300/oz) despite several geopolitical hotspots making headlines. What's underpinning the price weakness?

Raj Ray: The issue is that despite the geopolitical backdrop, the fundamentals still appear weak. The big drivers demand from India and China and gold exchange-traded fund shave been more or less flat year-over-year. China is still digesting the gold it purchased last year. And, although price premiums have declined in India following the recent Bank of India's move to permit trading houses to import gold again, further relaxation of the import tariffs is not forthcoming. If not for geopolitical conflicts providing support, gold could have moved much lower than $1,300/oz. I don't see a big driver to push gold higher over the next six to eight months.

TGR: India has imposed high tariffs on gold imports and those have resulted in a marked increase in gold smuggling. How is that influencing the gold prices?

"The first time two royalty companies came together to bid for a single project was with True Gold Mining Inc.'s Karma."

RR: I don't think there has been a marked impact on gold prices in India due to smuggling. The World Gold Council says about 250 tons of gold are smuggled into India each year. If you add that to the official gold imports of roughly 800850 tons, you still have a shortfall of around 200300 tons based on average annual imports. What might be something to look out for heading into the wedding season is the rainfall and its impact on food production. Rural India accounts for 6070% of India's gold demand. The rainfall outlook has improved slightly, but a rainfall shortage could make the government reluctant to reduce the import duties anytime soon. It would also mean that people have less money to spend on gold.

TGR: You said China is still digesting its 2013 gold hoard. How long before China is consuming gold as it did in 2013? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/XllhbJHoAYg/16239

Position Yourself for Fall Fireworks

The Gold Report: On June 11, on GoldStockTrades.com you wrote, "Some of my charts are showing a potential reversal in the precious metals." What are those charts telling you in late July?

Jeb Handwerger: In early June it appeared that the junior miners tracked by the Market Vectors Junior Gold Miners ETF (GDXJ), which I use as a proxy for the junior gold miners was making an inverse head-and-shoulders pattern between $34 and $35. Then the junior miners had a very strong rally in June, with an intra-day high of $46. Now we're forming what I believe is a potential crossing of the 50-day and the 200-day moving averages a golden cross. This could signal the final turn from a secular bear market to the beginning of an uptrend.

TGR: Is gold close to a golden cross? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/nT6pexKp3-o/16200

1.2 Billion Passwords, Putin and Cyber-Warfare

Normally the summer months tend to slow down as most traders like to get away for a short break and a little R and R. This year however has been different, as turmoil in the world stage continues. You only have to look at what is going on in the Ukraine, which continues to escalate with Putin's quest to restore the old Soviet Empire. Over in the middle east, the picture is grim and the hatred between Hamas and Israel shows no signs of a resolution. With all that going on, you would think that nothing else could come along to upset the apple cart.

The biggest news this week in my mind was not the Ukraine or the conflict between Hamas and Israel, it was the theft of 1.2 billion usernames and passwords!

This astounding feat was accomplished by a small group of eight Russian hackers. As you may recall, the US and Europe upped their sanctions on Russia, and tit for tat, Russia turned around and cut imports from both Europe and the US. I am afraid that the theft of 1.2 billion usernames and passwords is just another escalation of cyber warfare that Russia is spearheading against the West. [Read more...]

Is The Gold Rush On?

Today, I'm going to be focusing on gold (FOREX:XAUUSDO). It would appear as though this market had a number of cycles that are coming due and some that have just passed. It also looks as though all of the problems in the world haven't had any real powerful effect on gold. Normally in times of uncertainty, gold has been the go-to asset for most investors, but for some reason, not this time.

With today's strong upward market action, there have been a couple of technical indicators click over to the upside, these indicators are the forerunners of a larger, more extended move to the middle of September. By mid-September, gold could be trading at the $1,420-$1,430 level, if all of the technical indicators line up.

For many traders, gold has been somewhat of a disappointment in 2014, even though it is plus some $70 for the year. Many gold bugs were expecting much higher levels by this time, given all of the uncertainties with the banks and conflicts around the world.

The next 4 to 6 weeks could be very exciting in this precious metal and I expect this excitement to come in the form of a move to the upside. In this detailed video, I will show you exactly where the cycles are, plus the technical indicators that I'm watching closely for further confirming evidence that a bull move is underway.

Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

John Hathaway and Doug Groh: Buy Gold Like It's 1999

The Gold Report: In a 4th of July investor letter, you wrote that the precious metals complex, both mining shares and bullion, appear to be in the process of completing a major bottom, and you're more comfortable with the proposition that the downside potential has been fully exhausted. What are the signs that it's really turning this time?

John Hathaway: The gold futures chart is showing that we are in the process of a reverse head-and-shoulders pattern, which is a sign that a bottom has been completed. It means that downward momentum has been exhausted. This bottom will be confirmed when gold trades above $1,400/ounce ($1,400/oz), which is a stretch from where we are. At least we can say fairly credibly that it's shaping up to be a bottom, but we may test it over the summer.

Source: International Strategy Investment Group LLC

TGR: Are statistics on money flows telling you that investors are starting to get interested again? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/Eiv8jVkSasM/16194

Next Gold Buying Opportunity May Be Just Around the Corner

By: John Kosar of Street Authority

Major U.S. indices closed mixed last week, with the broad-market SP 500 and tech-heavy Nasdaq 100 closing higher and the blue-chip Dow industrials and small-cap Russell 2000 closing lower. The bigger takeaway to last week's lack of direction is that the bellwether SP 500 has been moving sideways for the past month and is essentially unchanged since July 1.

This recent loss of upward momentum suggests some distribution/profit-taking has been occurring and defines a near-term decision point in the index, bordered by 1,986 on the upside and 1,953 on the downside, from which its 2014 advance must resume if still healthy and intact.

Small Caps, Volatility Will Be Key Again This Week
In the July 14 and July 21 Market Outlooks, I pointed out that the Russell 2000 and the Vanguard Small Cap Growth ETF (NYSE: VBK) were situated right on top of major support levels and amid favorable conditions to resume their 2014 advances -- if they were still valid. Following initial rebounds, Friday's sharp decline positioned both back on top of these levels -- 1,143 on the Russell 2000 and $121.53 on VBK. [Read more...]

Article source: http://www.streetauthority.com/node/30470950

The Greatest Risk To Investors Today

By: Jody Chudley of Investing Answers

We've seen this set-up before...

All through 2006 and 2007, I heard some of the smartest minds in the investment game warning about the massive housing bubble that was about to pop. For a long time, these smart folks looked wrong, as housing prices kept going up and up.

Then things changed in a hurry, and we suffered through the worst credit crisis in our country's history and a housing bubble collapse. Anyone that didn't heed the warnings got crushed.

I see the same thing happening today. There have been warnings that we could be in for severe inflation ever since the Federal Reserve rolled out the printing presses back in 2008 with its "quantitative easing" program.

So far, not much has happened. However, similar to the housing bubble, that "nothing" could turn into something very quickly.

After years of easy money policy by countries around the globe, the inflation pump could be primed. [Read more...]

Article source: http://www.investinganswers.com/investment-ideas/growth-investing/greatest-risk-investors-today-22097

Currencies, Gold And The Big Picture

Here are the monthly views of the basket cases we call major currencies.

Uncle Buck and his reserve status were leveraged to the hilt by "The Hero" and now his successor is trying to gently talk the Fed out of its policy stance over time.  In other words, tightening is going to come one way or another and Janet Yellen is trying to go the orderly route.  When this process becomes disorderly, the USD is likely to benefit from the liquidations elsewhere in the asset world.

Technically, USD is in a long basing pattern.  There are those who think it is basing before a renewed decline, reading a Symmetrical Triangle (continuation) pattern into poor old Unc.  I think the odds are it is bottoming over the post-2008 years when inflation – try as they might to have promoted it – simply has not taken root.  Leaning bullish, watch support and resistance.

usd

 

Long ago we projected a rally in Uncle Buck’s chief competitor, the Euro.  This was due to a bottoming pattern (formed on shorter term charts) and unsustainable negative hype about the Euro crisis.  The target was around 140 +/-, which is the top of the post-2008 downtrend channel.  Euro remains in a big picture downtrend and if global asset markets start to come unwound in the coming months, it is not Euros people are going to run to, I can tell you that.  Bearish below the upper trend line. [Read more...]

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