My neck hurts watching things fly all around post-FOMC.
It sure looks like Santa has arrived now, not waiting until next week. Wheee! Rah rah bulls! I am one of you for a short time. Maybe the 1929 analog is a good one after all because it was calling for another lurch higher in essence, now. So if there is follow through the rest of the week Santa is here and revelers should plan to be nimble.
As for the precious metals, they too looked like they wanted to party and then? Well, it is 2013 after all. Gold is a lump of coal.
A setup is in play, however. I had expected the precious metals to dump on a taper and that may or may not be what they are doing. The reversal to down in the face of a humping stock market was not good and it can be argued that they could use a final puke to destroy the last of the 2001-2011 guru geniuses. But the play for early 2014 is probably going to be to get contrary to what has been over the last year.
I guess I’d have to say that I am satisfied with how today went because the Fed tapered and things make sense, finally.
I did far better than usual on this one two times in a row and do not want to push my luck. I also want to own the stock at the right price because I think it’s got great potential.
To review, I bought OMED as the bottom feeder that I am down around 13, looking for a seasonal (tax loss) play. Then I got lucky, news came out and I sold near the top.
The disappointment could be on the part of people thinking a 1929 style market crash is imminent and that a massive gold rally is also imminent.
The disappointment could come in the form of interim unpleasantries for stock market bears (although the crash analog making the rounds does call for another surge upward) and gold ‘price’ casino patron bulls. Why? Because CNBC by way of Zero Hedge is joining the chorus now (the chorus has included this site with its guest posts by Tom McClellan) making noise about the 1929 market crash analog. As a bonus, the TA talking about a 1929 style stock crash is also looking for a massive up move in gold.
Silver & Gold Surge on POMO; Demark Tells Santelli “Big Move Coming”
My plan remains for a market top (of some kind, not necessarily a crash… yet) in the first half of 2014 and a gold bottom coming sooner, rather than later. But first we have to finish out the year and get through mid-January, eh? So don’t get emotional about the 1929 crash hysterics nor the massive rise in gold hump just yet. Why not stay balanced?
Be intact first and ready to speculate second.
It’s ‘taper’ talk time again and here is a post that is only too happy to join the cacophony…
Dear Federal Reserve, please signal what would be at least a symbolic gesture to the market and pretend to tighten policy by beginning a tapering of long-term bond buying. We know inflation is being promoted via ZIRP at the discount window and via money printing used for T bond and MBS asset purchases.
Now it is time to ‘taper’ and let long-term yields rise if that is what the free market wants them to do. Given the decades-long limit at the 100 month EMA (AKA the deflationary backbone) potentially imposed by this chart, a further rise in yields is debatable anyway if all you plan to do is taper a bit. The ‘Continuum’ in the Long Bond’s yield is at this would-be limit point after all.
30 Year Yield, Monthly