NFTRH 357 Out Now

By Biiwii

#357 is about road maps for the US stock market.  There is one road map for the immediate-term, one for the next 1-2 months and then another, which will be the decider between a new, manic and bullish stock blow off phase or a brand spanking new little baby bear.

Regardless of what the big answer is in the fall, the next 1-2 months is going to be very trade-able, in both directions.  Parameters are clear.

As for the precious metals, they are a work in progress.  For now, the US stock market is a better trading vehicle, technically.  I’d advise people to tune out anyone who would try to use last week’s events to scare people into gold.  Gold will get where it is going in its due time, and it does not need pompoms and cheering squads to help it.

nftrh 357

Stock Market, Free Report

By Elliott Wave International

[biiwii comment]  It’s a promo, not an article.  But a promo well worth looking into IMO.  Recall, Prechter, along with only a very few others (my hand raised) caught the bottom of the 2008-2009 crash and went bullish.  Now, all these years later everyone has become bullish and the market, at the least, is again wonderfully volatile.

Pandemonium in the Stock Market

This week’s stunning sell-off sent the Dow 1,000 points lower. Other markets have surprised investors lately, too:

  1. Crude oil just fell below $40 a barrel
  2. Gold just broke above $1160 an ounce
  3. The U.S. dollar is enjoying the strength not seen in years

Almost every step of the way, Elliott wave price patterns have guided Elliott Wave International and its subscribers:

  1. On July 24, EWI said to turn bullish on gold — the exact day of the intraday lows in gold and silver after four years of decline
  2. Crude oil has followed its Elliott wave script since 1998, including the all-time high near $150 in 2008 and the more recent secondary peak — one from which oil fell below $40 a barrel this week
  3. Wave patterns warned EWI and its subscribers of the huge declines in commodities and the huge rally in the U.S. dollar — both against nearly universal disagreement

The credit goes to the Elliott wave method. For the past 80 years, waves have warned thousands of investors like you about risks — and new opportunities! — at countless market junctures.

This week’s #1 story is the 1,000-point sell-off in the Dow. To show you what we’ve been saying about the markets, we just put together a new, free 2-page Special Report with most relevant excerpts from our flagship publications: Elliott Wave Theorist and Elliott Wave Financial Forecast.

It’s the kind of report a well-informed investor shouldn’t go without.

Read this new Special Report now — instantly, and 100% free — and see for yourself the evidence markets are presenting >>

6-Year Low in GLD’s Bullion Inventory

By Steve Saville

The Meaning of the 6-Year Low in GLD’s Bullion Inventory

At the end of the week before last the amount of physical gold held by the SPDR Gold Trust (GLD), the largest gold bullion ETF, fell to its lowest level since September-2008. What does this tell us?

In many TSI commentaries over the years and in a couple of posts at the TSI blog over the past year I’ve explained that changes in GLD’s bullion inventory are not directly related to the gold price. Neither a large rise nor a large fall in the gold price would necessarily require a change in GLD’s inventory, the reason being that as a fund that holds nothing other than gold bullion the net asset value (NAV) of a GLD share will naturally move by the same percentage amount as the gold price.

Continue reading 6-Year Low in GLD’s Bullion Inventory

It’s Always Worse Than You Think

By Doug Noland

Credit Bubble Bulletin

August 17 – Reuters Breakingviews (Edward Chancellor): “Financial markets, like religions, are faith-based networks. The complex structures of assets and liabilities that comprise markets are held together by a set of underlying beliefs. Unlike religions, however, financial dogmas are occasionally shown to be false. We experienced such a moment last week, when the Chinese authorities chose to devalue their currency.”

Contemporary global finance is a complex “system” of interwoven (electronic) “faith-based networks.” As the bursting of the global Bubble unfolds, myriad “financial dogmas” will be exposed as bogus. Too many have been little more than chicanery.

Continue reading It’s Always Worse Than You Think

Closer

By Biiwii

I have written here before how highly I thought of Joy Division, a group of kids from working class Manchester who didn’t want to play music, they had to play music.  I guess Joy Division can be blamed for a lot of the New Wave dreck that followed in their wake; that ‘think while you dance’ crapola.  Take the drummer’s idiosyncratic style and codify it for the masses.  But this was unique and IMO incredible.

Moving on, Closer is probably my favorite record album of all time because although I have not listened to it often, I have listened to it a lot over many years and never get a feeling of dishonesty or artifice from it in the least.  It just always sounds like a band playing in line behind a singer who is planning for his own funeral.  Which is pretty much what it was.

I went to see them once but unbeknownst to me they were already New Order as Ian had already killed himself and I guess the band were under contract or something.  What they were were frightened looking kids who seemed like dear in the headlights trying to figure out songs to play in a small, packed club in Allston, MA.  I think I may have been at the front of the stage of one of New Order’s first few shows ever, if not the first.

Anyway, for anyone with time to spare here is a beautiful and scary funeral dirge.  After the first song or two it gets going.

Covering Shorts

By Biiwii

[edit]  Also covered (sold) is the 3x Gold Miner bear fund DUST that I have used off and on against gold stock positions.  All in all, a good, but solidly unspectacular week (unless put in ratio to overall markets, in which case it was a rocket blast).  We have waited so long for movement and it finally came.  The next few months are going to get interesting from both bear and bull sides.  Money will be made… and lost as the herd is well, herded.

Since I am by no means an accomplished bear trader I have covered the short on the leveraged NDX bull fund (TQQQ) and the long-held short on SPY.  The latter thing took a lot of patience, but the fact that it was a straight, un-leveraged position made it easier to hold.

Support is down below, but I am not going to be greedy.  Who knows what the Jawbones might cook up over the weekend to manage the stock market?

spy

Gold Ratios

By Biiwii

For your viewing pleasure, some pictures that readers of this site and NFTRH.com have been aware of for some time now and NFTRH subscribers are repeatedly kept aware of (whether they like it or not).

Gold is not just another metal…

gld.dbb

Gold is not Palladium, a flipped over version of which (weekly PALL-Gold) gave us a DOWN signal months ago.

gld.pall

Gold is not just another commodity…

gld.dbc

Gold is much different in its best investment environment from the things previously promoted to have been beneficial for oil…

gld.uso

Silver is not gold either.  But it’s much closer, which makes it a sensitive component of the metallic credit spread (Hat tip, Hoye) to economic, financial and monetary events…

gld.slv

And of course Gold vs. US Stock market, making a move but still technically in a big picture downtrend…

gld.spy

Gold vs. Euro-hedged Europe…

gld.hedj

Gold vs. Yen-hedged Japan…

gld.dxj

Gold is none of these things, because gold does not do anything other than sit there as a solid, pretty rock that irrational humans have alternately over obsessed upon and ignored for long stretches.  That is what makes it a marker or barometer.  Its very lack of utility and income distribution make it the anti-asset.  In that resides its value when the levered up games start to unwind.

Other than that, I have no strong opinions on gold.  :-)

Bond Safety?

By Biiwii

[edit]  Upon re-reading, it’s another of those posts I sometimes receive critiques about.  Few conclusions and no clear direction.  Maybe that is just the point though.

@ Fidelity…

Equity outflows at 15-week high as investors seek bond safety

And there they go, conventional lemmings jumping from the frying pan, into the fire, soon to realize the fire is way too hot, and heading for that cliff over there.

(B)ut (i)t i(s) (w)hat (i)t (i)s and (N)otes (F)rom (T)he (R)abbit (H)ole are so named because we are all about anti-convention, as global markets have not been comfortably conventional since the late 1990’s, I think.  This most recent cycle has existed to put all of us malcontents, cranks and alarmists back in a box under the bed, if not into the dustbin of history.

Well today, conventional sheep are flocking to conventional positions.  “Bond safety” is what they run to when they are afraid of stocks.  Of course, with gold now showing strength, the promoters over there are retooling their former “China/India demand” and “employment growth will spur inflation, which will drive people to gold” pitches to something more appropriate for the times, when global economic contraction comes to the fore and deflation is front page news.

Imagine that, investors flocking to bonds while DEFLATION! is all up in the headlines.  Reminds me of Q4 2008, just before the next INFLATION.

This market is now officially fun again after the post-October drudgery that last month forced me to admit that my trading sucks and that I needed to take a time out and sit on my hands (as the market’s swings became too frequent and too contracted).

Do you see?  Investors are seeking safety in bonds.  Media are managing a global stock crash.  Bull trend followers’ heads are spinning (‘Am I still a brave, resolute, trend following stock bull?  Should I keep posting as such or is my inner fear barometer stronger than my resolve?’) and oh yes, the precious metals are bouncing while commodities continue to tank.

There are only a few entities who have called this environment.  One is an influence of mine, Bob Hoye (decisively, but on what some might find an inconveniently long time frame).  Another is NFTRH (less decisively, but on a very tight time frame).  This is a market that is going to put all the carnival barkers (including gold touts) in their rightful places because now changes are happening and it will not be so simple as ‘stocks are tanking, buy bonds!’ and obviously, the whole ‘economy brings inflation, buy gold!’ promo.

Tops are spinning on the table and it all makes perfect sense.  And I am not even a stock market bear.  I just do not buy or hold tops.  I look forward to a real bull market in the gold sector, but there is yet work to do folks.  The US market’s big trend is still up and gold’s is still down.  Not saying change is not in the offing, just saying trends have not yet changed.

With respect to gold, this summer’s event is so much more in line with fundamentals that matter than last summer’s Ukraine→Russia→Ebola pitch that was nothing more than promotion.  But there remain some rocks beneath the surface.

As to the article linked above, this certainly does put Martin Armstrong front and center, with his ‘final flight to the safety of the government bond bubble’ analysis…

LONDON (Reuters) – Equity outflows hit a 15-week high of $8.3 billion in the past week, with fears of a China-driven global economic crisis pushing investors towards safe-haven money-market funds and Treasuries, Bank of America Merrill Lynch said on Friday.

I have not really known what to make of Marty and his computer, but this is 100% in line with his forecast.

I just love a market where things are in motion.  Robo market was a dead thing, momentum waning and hopes fading.  Now resolution is to the downside.  From this point, it is now time to throw out the easy analysis and be prepared for the counter-cyclical environment we have expected upon completion of the post-2008 economic recovery (and all that paper and all those digits behind it).

Now you do not get points for just showing up and following the trend.  Now you find out if that which you hold true actually is.

Global Stocks Slide

By Elliott Wave International

Markets are moving! Want to get on board?

“When the alarm goes off and the dreamers awake, it will be pandemonium in the stock market.” — Bob Prechter, from the just-released Elliott Wave Theorist.

You would agree that markets around the world have served investors a lot of surprises lately:

  1. Crude oil just fell to $40 a barrel, a 6 1/2-year low.
  2. Gold — after hitting lows not seen in five years and disappointing just about every gold bug on the planet — just broke above $1150 an ounce.
  3. The U.S. dollar, doomed to failure by the mainstream consensus a few years ago due to the Fed’s “inflationary” QE policies, is enjoying strength not seen in years.
  4. Chinese stocks, up almost 60% YTD into their July peak, suddenly crashed, sparking fears of global contagion.

And almost every step of the way, Elliott wave price patterns have guided us and our subscribers:

  1. Last November, a joint bulletin from our Elliott Wave Theorist and Elliott Wave Financial Forecast called the low in gold and silver to within two days. Last month, on July 24, we issued another bullish bulletin — the exact day of the intraday lows in gold and silver after four years of decline.
  2. On June 6, 2012, we sent to subscribers a Special Report calling the low in 10-year T-bond yields after 31 years of decline. The top in T-bonds came right around the same time.
  3. Crude oil has followed its Elliott wave script since 1998, including the all-time high near $150 in 2008 and the more recent secondary peak — one from which oil fell to $40 a barrel this week.
  4. Wave patterns warned us of the huge declines in commodities — and the huge rally in the U.S. dollar, both against nearly universal disagreement.

Plus, says Bob Prechter in the new Elliott Wave Theorist,

“With rare foresight, our European and Asian analysts predicted the failure of both the Swiss franc peg and the Chinese yuan peg, dramatic events that caught economists completely off guard. You have to know a lot about markets to do these things.”

Yet the credit doesn’t go entirely to our analysts — it goes to the Elliott wave method. For the past 80 years, waves have warned thousands of investors about risks — and new opportunities! — at countless market junctures.

Today’s #1 story is the 358-point sell-off in the Dow. Both the DJIA and the S&P 500 are now in the red for 2015.

Even the white-hot NASDAQ ended the day with a 3% decline

Is this a “normal correction” — or are the “bubble days” really over?

Prechter’s new Elliott Wave Theorist — which got published just yesterday (Aug. 19) — says:

“When the alarm goes off and the dreamers awake, it will be pandemonium in the stock market.”

We invite you watch a free 5-video series from Elliott Wave International’s Chief Market Analyst Steve Hochberg, “Economic Crisis Meets Investor Opportunity.” We think you’ll find Steve’s insights into global debt, real estate, the Federal Reserve and shifting investor psychology valuable, while his charts will show you the evidence that informs his forecasts. You’ll get a perspective on the markets that you simply won’t find elsewhere.


Free Club EWI Video Series
“Economic Crisis Meets Investor Opportunity”
(5 Videos)

See the rest of the hand-picked highlights from Steve Hochberg’s recent presentation: A compelling argument, supported by charts, facts and figures, for a precarious financial and economic position America finds itself in today.

Steve’s video presentation topics are: “A Shorter Fuse on a Bigger Debt Bomb,” (5:13 min.) “Global Stock of Debt,” (1:55) “What Growth Boom?” (1:45), “The Housing Crater” (2:54) and “Failed Economic Growth” (4:17)

Free Club EWI members, watch all 5 videos now >>

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This article was syndicated by Elliott Wave International and was originally published under the headline Global Stocks Slide. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Pivotal Events

By Bob Hoye

Bull Markets Die Epicurean

bob hoye

Even Slower Now

By Alhambra Investment Partners

June was the for-sure liftoff point early in the year. That followed last year’s for-sure exit as March, April at the latest. Now more than a halfway through 2015 September is increasingly in doubt. They have to start somewhere even if they claim a methodical and slow pace to ensure as little disruption (in their twisted view). As I wrote yesterday, “’Intend to move slowly’ gets slower with each ‘dollar’ wave and that is the relevant motion of policy and economy quite against all the continued propaganda.

The first reaction from the Wall Street Journal is telling in that regard:

The Federal Reserve’s next policy meeting is four weeks away and officials show no clear sign of having settled on a decision about whether to raise short-term interest rates at that time.

That cannot be in light of all the certainty with which the recovery was given and not all that long ago. Last year was 5% GDP and full employment while this year stands as the gaining drip of “downside risks.” At the very least, it shows the FOMC knows nothing when it comes to this economy (and any other).

Continue reading Even Slower Now