Timing & trends

Lots of action and profit opportunities!

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Posted by Larry Edelson - Uncommon Wisdom

on Monday, 28 May 2012 06:41

Over the last couple of weeks, we’ve seen plenty of action, fortunately following right along with my forecasts. So let’s take a quick look at the charts.

This will be a bit of an abbreviated video today because it is a holiday, but I still want to show you the charts of the main markets.

Let’s start with gold. As you can see here on this chart of gold, gold has indeed slid quite sharply down to around the $1,526 level, testing the low from late December 2011, and it is finding some technical support there.

We should see a bounce, bringing it back up to say $1,600, $1,610. But I do believe, based on all of my indicators, that we will see a break below $1,500 down to around the $1,440 level in the coming weeks. So I remain bearish on gold.


Now let’s also take a look at silver. Silver has been following gold quite closely and is falling actually even sharper than gold, which is to be expected.

Silver’s finding some technical support in here, but I do expect silver to break through the $26.60, $27 support level and move lower still.

All of my indicators remain bearish in silver.


Let’s take a quick look at the U.S. Dollar Index as a proxy for the U.S. dollar. Indeed, in the last video update I did for you, I did indicate that I expected the dollar to break this resistance line here, mid-channel, and move above the 81, 82 level.

That’s precisely what happened. I wouldn’t be surprised to see a little pullback then a further rally up to 84. This is largely being driven by the meltdown in Europe and the European sovereign-debt crisis, which in the short term is bullish for the U.S. dollar.


Now let’s take a look at the Dow Industrials. We have begun to see a rather sharp sell-off here. However, we’re coming into some very important support levels in the Dow. More specifically around 12,250.

As long as that level holds, we should probably trade back up to the 12,900 level. And we’ll have to see what happens at that point. If 12,250 gives way on a closing basis, we could see further losses in the Dow — down to about 11,800 or maybe even 11,500. It’s a little too early to say.


Right now I want you to enjoy your holiday. We’ve got a lot of action-packed markets that will probably continue right after the holiday as they open tomorrow morning and heading into June. I see lots of volatility and lots of trading opportunities.

So stay tuned. This is Larry. Again, have a nice holiday today and a good week.


Larry Edelson has over 34 years of investing experience with a focus in the precious metals and natural resources markets. His Real Wealth Report (a monthly publication) and Power Portfolio provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management.

For more information on Real Wealth Report, click here.
For more information on Power Portfolio, click here.




Timing & trends

Mark Leibovit: How To Profit On This Current Seasonality in Markets

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Posted by Mark Leibovit via Don Vialoux

on Friday, 25 May 2012 08:26

Ed Note: Mike's Guest Tomorrow is David Bensimon:

Mark Leibovit spells it out in a quick 6 minute comment below. In short, Mark went on a Sell Signal back on March 5th and continues to think Markets are in a normal Negative Seasonal pullback that has further to go. Mark thinks there is still time for the bears to bring the Stock Market, as measured by the S&P 500, down below the recent low of 1292 and if he were an investor he would remain in Cash waiting for a confirmed low sometime between now and July. 

As for agressive traders he would be biased to the short side.  

Click on either image or HERE for all the details:

Picture 3

Click on image or HERE for all the details:


Picture 1


Timing & trends

An Argument for a Contrarian Investment

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Posted by Richard Mills Ahead of the Herd

on Thursday, 24 May 2012 00:00

While it might not look like it now, the most investable trend over the next 20 years is going to be in the resource sector, the renewable and non-renewable resources, the minerals, ores, fossil fuels and biomass a wealthier and growing global population is increasingly demanding from finite supplies and already strained production capabilities.

For example:

The metal content of copper ore has been falling since the mid 1990s. A miner now has to dig up an extra 50 percent of ore to get the same amount of copper. As grade drops the amount of rock that must be moved and processed per tonne of produced copper rises dramatically – all the while using more energy that costs several times more than it use to. With the lower grades of ores now being mined energy becomes more and more of a factor when considering economics.

The average grade of gold deposits has been dropping as well.

“We took the nice, simple, easy stuff first from Australia, we took it from the U.S., we went to South America. Now we have to go to the more remote places.” Glencore CEO, Ivan Glasenberg in the Financial Times describing why his firm operates in the Congo and Zambia



Ed Note: Richard Mills entire argument & charts to support the conclusion posted below can be read in its entirety HERE 

Conclusion - Junior’s, An Argument for a Contrarian Investment

Our reality - we’re living on a relatively small planet with a finite amount of reserves and a growing human population.

The world’s major miners are making immense profits but they are having an extremely difficult time replacing reserves let alone growing them. Mining is the story of depleting assets, that asset must be constantly replenished, miners that want to stay in business must replace every pound, oz and gram taken out of the ground.

Juniors, not majors, own the worlds future mines and juniors are the ones most adept at finding these future mines - majors do not make discoveries, juniors do, that’s their function in the resource food chain. Junior resource companies already own, and find more of, what the world’s larger mining companies need to replace reserves and grow their asset base.

Junior resource companies - the same ones who today are so oversold and undervalued - are the present owners of the world’s future commodities supply and, most important for investors seeking outsized returns, they act like leveraged exposure (with price gains many times that of the underlying commodity) to the specific commodity(s) investors want exposure to.

Are there a few junior resource companies, with exceptional management teams operating in politically safe jurisdictions, on your radar screen?

If not, maybe there should be.

Richard (Rick) Mills



If you're interested in learning more about the junior resource and bio-med sectors please come and visit us at www.aheadoftheherd.com

Site membership is free. No credit card or personal information is asked for.


Timing & trends

Bob Hoye on Real Estate, Gold, Interest Rates & Stocks

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Posted by Bob Hoye via Michael Campbell

on Wednesday, 23 May 2012 08:57

No one can say that Bob Hoye of Institutional Advisors didn't see the future clearly and in time to take advantage of a once in a generation market dislocation when he declared in October 2007 that:  "A credit tsunami the likes we haven't seen in generations is about to hit"
Certainly each of the 500,000 listeners who heard Hoye's warning on Michael Campbell's Money Talks radio show had he opportunity to either get out of the way of the oncoming speeding economic/market train, or profit handsomely shorting the greatest market drop since the 1929 collapse. 
Bob Hoye was back on Money Talks a few days ago with some additional advice, some of which is pretty unnerving,  nevertheless Hoye was again very clear that we are now at another critical point in the markets and that its now time to either save your capital and get out of the way, or make some money. Whole interiew here beginning at the 24:30 mark or summary below 
First the background. Hoye thinks that there is no way that the Federal Reserve or other Central Banks around the world can overcome the Worldwide deflationary pressures. In other words no inflation as "the credit contraction is, and will continue to overwhelm interventionist Central Bankers" who "are not issuing credit that pushes prices up". Why? Bond vigilantes in a word. 
As the Central Banks in Italy and Spain have found out they have to raise interest rates on their bonds to attract investors, and when interest rates rise Governments and businesses alike "cannot service the debt that is out there".  Worse Hoye sees that the the latest recovery from March of 2009  "in North America  is rolling over, probably as we speak. Its already dead in Europe where they've had two quarters of negative GDP growth which defines a recession, and also perhaps really slowing down in China which shows up in your basic commodity prices." With the economy contracting there is "nothing that government economists and Central Bankers can do to issue credit that is going to overwhelm the natural tendency for credit to contract."
Hoye also uses history to prove his point there are situations where Central Bankers cannot generate inflation in Post Bubble contractions. Citing  John Law's attempts to thwart the aftermath of the 1720 South Sea/Mississippi Bubble by replacing solid coinage with paper money he generated on 8 printing presses going in Paris at the time. Despite John Laws Central Bank effort he was unable to prevent the credit contraction he was trying to avoid. 
What does this all mean to today's investors? 
1. Real Estate: 
In short Hoye thinks that real estate is not going to recover in this post bubble economy. Worse, very high real estate in places Vancouver are going to experience a fall in pricing like US Real Estate. Hoye points out that after the 1980 boom "British Properties in West Vancouver and and high end properties in Toronto fell to 1/3 of their 1980 highs. Hoye again cites history to support his post bubble real estate argument by looking back to a farm price index after the 1873 bubble in England.  That index of farmland values hit 58  at the height of the bubble in 1873  then fell consistently for the following 20 years down to 38.  In other words it was just a long bear market in land values after a typical post bubble economy. 
 2. Interest Rates:

Interest rates will remain low as long as confidence remains in the North American sovereign debt market."You have this oddity in the US of 10 year notes at less than 2%, and the only way I can explain these low interest rates is that in a post bubble crash the serious money that's still around goes to the most liquid items and that is gold, and it also is treasury bills in the worlds senior currency which is still the US Dollar. So its not the Federal Reserves policy to lower interest rates, its a post bubble condition that short rates fall".
3. "The Gold Market is Extremely Oversold"
Buy Gold Stocks. "Just looking at the Gold Shares now, we have an index in Gold Shares going back to 1900 and there has been only one other time were it has been this oversold and that was in 1924. So one could say that this is about the most oversold you can get, and our advice on Gold Shares a few weeks ago  is that people should be accumulating good quality Gold Shares into weakness. It might take another week to set the low in here, but then the performance out of this oversold should be rather good. I am content buying either good exploration stocks where you know the story, or some of the senior Golds or Gold share ETF's".
4. The Overall Stock Market
Hoye was looking for  a rounded top market to occur around February 2012. As it happened the base metal mining stocks peaked in early February while other areas peaked through April. Hoye sees that the "last two weeks have really confirmed that we are in an intermediate sell-off" but that for "a short term trader, the S&P is getting oversold and we could look for a rally in here". As mentioned above despite the potential for Stock Market weakness, Hoye likes the Golds.


Timing & trends

The Dreaded "Left Tail" of Stock Market Returns

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Posted by Mark Spitznagel, CIO of Universa Investments LP

on Monday, 21 May 2012 23:49

Mark Spitznagel: The Austrians And The Swan - Birds Of A Different Feather

On Induction: If it looks like a swan, swims like a swan…

By now, everyone knows what a tail is. The concept has become rather ubiquitous, even to many for whom tails were considered inconsequential just over a few years ago. But do we really know one when we see one?

To review, a tail event—or, as it has come to be known, a black swan event—is an extreme event that happens with extreme infrequency (or, better yet, has never yet happened at all). The word “tail” refers to the outermost and relatively thin tail-like appendage of a frequency distribution (or probability density function). Stock market returns offer perhaps the best example: 

universa 1\

What is a black swan event, or tail event, in the stock market? 

It depends on who’s asking. 

To those familiar with Austrian capital theory, the impending U.S. stock market plunge (of even well 

over 40%)like pretty much all that came before in the past centurywill certainly not be a Black 

Swan, nor even a tail event

Nonetheless, the black swan notion is paramountin perception: Market participants’ failure to 

expect a perfectly expected eventthat is, they price in only Anglo swans despite the Viennese bird 

lurking conspicuously in the weedsmuch like what is happening today, brings tremendous 


....read the entire analysis including charts HERE 


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