Today is the first day of spring and maybe this is the cause for the spring in the markets. March 20th also happens to be "International Happiness Day" and I'm sure that many investors have a smile on their face today with the way the markets are acting in Europe, Asia and the U.S.
Today, I'll be looking at gold prices because they are acting and doing something that they haven't done in a long time and I want to share that with you in today's video. It is impossible to pinpoint what is causing gold to rally, whether it is short covering or the potential that Greece is going to implode any day now. Either way, it's not important what is causing the rally. The important thing to remember when trading is to get the direction right and not worry about what is causing the trend. I remember when I was in the trading pits in Chicago, I asked someone why the market was going up and he said to me, "It doesn't matter, it's going up". There is a lot of truth in that comment. That's one of the big takeaways in trading, don't over think markets.
As I write this commentary before the market opens, we could be seeing the equity markets close well towards the end of the day and possibly closing in new high ground on short equities before the weekend. The NASDAQ is very close to breaching the 5000 level, a close over that area today can be viewed as being very positive for the weekend.
Crude oil also appears to be finding some support at lower levels but has not yet reversed trend and turned around. I will be looking at that market to see where the key points are for a trend reversal to the upside. Remember markets can get very crowded on one side of the ledger when everybody believes that the trend will continue and go on forever. When that happens, a market tends to reverse and go the other way. The reason that happens is because markets are forward-looking trading instruments.
I will be getting into the recent Trade Triangle scan today to find new trades that may be just emerging. You won't want to miss that part of today's video.
This being Friday, I will of course, be looking for weekend trades using our "52-week highs on a Friday" strategy.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Prices move in cycles. They have for the last 1000 years, today is no different, even though gold bugs want it to be otherwise. You haven't noticed that gold has been falling, the dollar is rising? NOTHING has changed with respect to the fact that the dollar is otherwise worthless, except for the fact that its value has been going up while the only REAL currency has been falling. That doesn't tell you something?
I pay attention to the charts, not all the noise I here from outside. And there is a LOT of noise. Especially lately about the FED hiking the Federal Funds rate. They won't. The market doesn't want them to raise rates, therefore they won't. But they will jabber on and on about what they will or won't do.
See for yourself the future. this chart was posted online almost exactly two years ago. Note the predictions in the last sentence. Eerie, isn't it? How could they be so accurate?
http://www.businessinsider.com/chart-long-term-us-dollar-cycles-2013-3
The charts don't lie. 6-10 years on the bull cycle, starting in April 2011. Simple math says a top in the dollar somewhere between 2017 and 2021.
As for fundamentals, something very few have realized. The world is awash in debt. More debt today than at any time in the modern past, going back 1000 years or more. What happens when this debt bomb implodes? A mad scramble for the only currency EVERYONE trusts. That's the dollar. When all is said and done and the top is reached for the dollar and gold has finally bottomed, the dollar may fall but gold is most likely going to be stuck in a long term trading range, just like the last time.
We cannot revisit the past. Its GONE. The world really is a very different place compared to the 60's and 70's. Gold is just another commodity like copper, corn or cattle. Up, down, up, down. It is NOT a store of value unless you look at the very long term. but even then its a very poor store of value.
A dollar invested in IBM in 1962 is worth $180 today. A dollar invested in gold in 1962 is worth $34 today.
Almost anything else one could invest in has done better than gold at preserving assets.
Especially so when you look at a shorter time frame. If you listened to the gold bugs then you have been buying gold for the last few years, as it steadily declined in value. They tell you its insurance. It was 500 years ago when there was nothing much else you could buy for insurance, but today?
We live in a far different world that when gold was currency.
Try an experiment. Go down to your supermarket with a 20 dollar gold coin and try and buy something. Coin says $20 and that's what they will value it as. Or they won't accept it. I see this happening all the time with silver quarters. For commerce they are worth a quarter.
I could go on and on, but I think you get the point. Or not. Gold bugs are addicted to the idea that gold is better than everything else, even when it so obviously isn't.
Andy
An impending Greek disaster- how about an impending dollar disaster?
We won't see a dollar disaster for at least another 10 years or so. When the world economy implodes the dollar is what everyone is going to want. You cannot pay off dollar loans with anything but dollars. Gold in the meantime is going to go south and stay there for a long time, trading between $600-$800 for many years to come.
Dude, I want some of whatever you've been smoking, because it must be some potent stuff! 😀
You can't possibly know what you just wrote about the price of gold, Andy, so one has to ask why would you bother? Confidence is the only thing supporting the $, and our government appears wholly determined to destroy confidence in everything other than their ability to forcibly destroy.
The US is rapidly becoming seen by the rest of the world for what it is. A continuation of what the Germans began in the 1930's, an equally reviled reich.
It's not confidence that we smell.