50-slides-for-the-gold-bulls-incrementum-chartbook
I post these charts for a historical reference point. I do not use them to predict where prices will go. Note though that rising CinC (currency in circulation) doesn’t always correlate to rising asset prices.
Update: Oct 6th: A contrarian: http://energyandgold.com/2016/10/04/bob-moriarty-i-am-ready-to-buy-silver-at-16/
Borrowers want capital, but they get money–newly created credit money. More credit money has been issued by the banking system than savers have deposited (“fiduciary media”). Those participants in the economy who suffer losses due to price changes were not parties to the original credit transactions. They are participants in the economy who receive the new money late in the process, after prices have been bid up by the credit money. –Mises (so much for the harmless actions of the Fed)
What Happens When You Buy Quality: October_Quest_2013
CAPITULATION IN THE MINERS
When I use the word capitulation it implies an ending to the bear market in precious metal equities, however NOTHING is certain in markets. I know not all public gold stocks will go to zero. Eventually, the laws of supply and demand assert themselves and you can only buy assets super cheap if sentiment is SUPER bearish. I think in late June when gold hit $1,180, gold stocks made a FEAR bottom while today they are going through despair/throw in the towel selling.
People see no hope so why own. Volume is relatively low and the selling persistent–day after day.
The above chart shows the sell-off from new highs over the past 90 years in the BGMI, the Barron’s Gold Mining Index). Currently, 2013 shows about a 63% loss or in the range of the past 10 bear markets.
Read more: http://www.gold-eagle.com/article/dow-jones-and-barron%E2%80%99s-gold-mining-index-1885-2013
The low relative volume, the historical depth of the sell-off and the demarcation of price movement between high quality (RGLD, FNV, SLW) and low quality gold stocks (NEM, GLDX) as the chart above shows, leads me to believe that we are closer to the end of the decline.
From: http://www.acting-man.com/?p=26553
We continue to get one ‘do or die’ moment after another in the charts of gold and gold-related instruments. So far, the outcomes have obviously been bearish every time since the 2011 peak, but at some point that is bound to change, as the fundamental backdrop continues to be gold-friendly (note that not every aspect of the fundamental backdrop is – for instance, the declining federal deficit is probably viewed as a negative by market participants). Often it is precisely at those times when nothing seems capable of turning a market around that surprise changes in trend can and do occur.
Note that gold sentiment remains absolutely dismal. Recently Mark Hulbert’s HGNSI (gold newsletter writer sentiment index) stood at minus 20 (meaning gold timers recommended a 20% net short position on average), while the daily sentiment index among gold futures traders (DSI) stood at 9 (all time low: 5). Bearish sentiment in the sector rarely becomes as extreme as it is at the moment. Of course it has been quite negative for some time now, but the current readings are rather extreme even so.
A major reason why we continue to maintain that the fundamental backdrop remains gold-friendly even though the price action suggests a bear market is still in progress, is that we believe that mainstream analysts are quite mistaken when they assert that it is back to ‘business as usual’ in the economy. It clearly isn’t.
History is being made today!
Of course, if you believe QE will lead to sustainable growth without monetary mayhem then stay away from anything to do with gold.
SHORTING SOCIALISM
The company exists as a social transfer mechanism between Western investors and Brazilian government officials and Petrobras workers. No hope.
Posted in Investor Psychology, Search Strategies
Tagged Acting Man, Bakshi, BGMI, Gold Stocks, Quality Companies
Gold always does what it should do…it just never does it when we think it should. –Richard Russell
Past bear markets in precious metals miner stocks have been vicious since they are last in the production cycle as a commodity producer.
Past history of mining shares….
Unless these past three days are simply window dressing and short covering, then something meaningful may be occurring:
The GDX represents several of the senior gold producing companies. The GDX has under-performed the gold price as represented by (GLD) for about 5 years and especially in the past two years. Note the radical change in the past two days as gold, ironically, fell below the all-in cost to produce an ounce of gold for the majority of mining companies.
Two days is just one sign, but a big one in my opinion. Until after the Fourth of July weekend, the true trend may be revealed since this is quarter end and before a long holiday next week. I am bullish for the long-term in SELECTED, WELL-CAPITALIZED companies. Remember to do YOUR own thinking and correlation is not causation. I have been two to three months early and down 20% so far, but I sense a turn–finally?! Prices are absurd.
Perhaps better to listen to an old pro (albeit biased)
Speaking toward what he’s seeing from the institutional investor community, Rick said, “This is the fourth time in my career that I’ve seen capitulation selling, and it get’s ugly and spasmodic…Last week I was on the East Coast of the United States visiting very large institutional investors, and the level of indecision I saw was absolutely classic of the period right before capitulation—andthis week, right on schedule, we’re getting it. [It’s] truly ugly, but it’s the kind of cleansing the market needs.” (Source: www.bullmarketthinking.com)
Hear interview: 6272013rule
Learn more:
http://www.kitco.com/ind/Trendsman/2013-06-28-Epic-Opportunity-in-Gold-Stocks.html
http://www.stentormedia.com/gold-mining-stocks-have-outperformed-the-dow-since-1920
http://www.fgmr.com/gold-mining-stocks-have-outperformed-the-djia.html
http://www.gold-eagle.com/editorials_08/lundeen062511.html
HAVE A GREAT WEEKEND.
PS: if you have a question, please post it in the comments section–my emails are swallowed up.