Gold Bull Janet & The Dow
Feb 4, 2014
- Global stock markets are tumbling. While mainstream media personnel discuss a “short and healthy correction”, many value-oriented investors believe that most stock markets are entering a significant bear market.
- Please click here now . Double-click to enlarge. I’ve highlighted the 14,5,5 Stochastics series, which I use exclusively on this key quarterly bars chart of the Dow. It’s flashing a gigantic sell signal.
- Note the declining volume that has occurred since 2011. For a closer look at that volume, please click here now . This monthly chart shows that since the fall of 2011, the growth of the money supply has not attracted sizable investment into the stock market.
- There have been more buyers than sellers, which has pushed the Dow higher, but the total amount of trading volume has declined significantly and consistently.
- While the Dow has gotten fundamentally weaker from a liquidity flows standpoint, gold has become fundamentally stronger. Weak-handed ETF investors have left the gold market.
- They’ve been replaced with very strong hands, in the Chinese gold jewellery market.
- While increasing Western mint coin sales make headlines in the gold community, investors should understand that the total tonnage involved in those sales is tiny, compared to Indian demand that has been stifled by their government.
- Unfortunately, many players in the enormous Indian gold market believe their government is quickly turning the gold import business into a dirty protection racket, controlled by the Indian mafia.
- Regardless of who wins the upcoming Indian election, it is likely to be followed by new growth in Indian demand.
- Late in the fall of 2013, I predicted that the Fed would begin to taper QE, and keep tapering until it was gone. I stunned a lot of investors, by suggesting that this “taper caper” would be bearish for the Dow, and bullish for gold and gold stocks.
- During 2014, I expect Dr. Janet Yellen to continue (and possibly accelerate) the tapering process that Dr. Bernanke started, creating more selling in the Dow, and more buying in gold stocks.
- Institutional money managers are under tremendous pressure to perform, and they are not performing now.
- Gold stocks were the best performing asset during the month of January. Even if the rout of global stock markets subsides, institutions are likely to move some liquidity into the precious metals sector.
- Most investors believe Dr. Yellen is a “dove”. I call her a “gold bull shark”. I think her main focus is going to be increasing the low official inflation rate, by increasing the velocity of the money supply.
- I don’t think she has much interest in QE or the stock market. I think she’s more of an “old school” central banker who is primarily focused on the inflation rate, gold, and commodity prices…. and rightly so.
- A picture speaks a thousand words, so please click here now . I think this picture sums up all you need to know about which market the gold bull shark is focused on.
- I’m forecasting global cuts in interest rates this year, with Dr. Yellen spearheading the process. I think she will be remembered as the Fed chief that orchestrated “significant revaluation of the gold price, in the free market”.
- Please click here now . Double-click to enlarge. From the standpoint of technical analysis, this monthly chart of US ten year bond yields supports my fundamental view that Dr. Yellen is going to oversee significantly lower long term interest rates. That should fuel a rise in inflation, and a significant rise in the “POYG”, the price of your gold!
- Note the position of the key indicators and oscillators that I’ve highlighted with red circles on that chart.
- For a shorter term look at ten year yields, please click here now . This daily chart suggests that Dr. Yellen will oversee a drop in the ten year bond yield, to the 2% area. That would likely push gold towards the August highs, in the $1432 area.
- For the past couple of weeks, I’ve asked investors to show a bit of patience with the gold markets. Gold is working off a technically overbought situation on the daily chart, and it tends to decline in front of most jobs reports.
- Please click here now . This daily gold chart shows gold working to rise above a key downtrend line, with my stokeillator positioned in the 50 area, where strong momentum-based moves can occur.
- The next jobs report is scheduled for release this Friday. There’s a good chance that the entire precious metals sector begins a fresh leg higher, once the drama surrounding that report subsides.
- Please click here now . Double-click to enlarge this daily GDXJ:gold ratio chart. Considering that gold stocks are technically overbought, they are holding up remarkably well while global stock markets are crashing, and the Fed is tapering. My suggestion is to put the proceeds of all gold stock sales into gold (via ETF, futures or bullion), rather than into fiat currency. If the stock market rout accelerates and Dr. Yellen cuts rates just once, gold could begin a powerful surge to the upside, while global stock markets keep falling!
Feb 4, 2014
email for questions: email@example.com
email to request the free reports: firstname.lastname@example.org
|Tuesday 19th May 2020
Special Offer for 321Gold readers: Send an email to email@example.com and I'll send you my free “Gold & Silver Junior Shotguns!” report. I highlight key junior miners set for magnificent upside action as gold bullion blasts above $1800. I include key tactics for each stock.
Updates Subscription Service: Note we are privacy oriented. We accept cheques.
And credit cards thru PayPal only on our website. For your protection
we don't see your credit card information. Only PayPal
|Subscribe via major credit cards
- or make checks payable to: "Stewart Thomson" Mail
to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario
L6H 2M8 / Canada
is a retired Merrill Lynch broker. Stewart writes the Graceland
Updates daily between 4am-7am. They are sent out around 8am. The
newsletter is attractively priced and the format is a unique numbered
point form; giving clarity to each point and saving valuable
Thomson is no longer an investment advisor. The information provided
by Stewart and Graceland Updates is for general information purposes
only. Before taking any action on any investment, it is imperative
that you consult with multiple properly licensed, experienced
and qualifed investment advisors and get numerous opinions before
taking any action. Your minimum risk on any investment in the
world is 100% loss of all your money. You may be taking
or preparing to take leveraged positions in investments and not
know it, exposing yourself to unlimited risks. This is highly
concerning if you are an investor in any derivatives products.
There is an approx $700 trillion OTC Derivatives Iceberg with
a tiny portion written off officially. The bottom line: