Friday Sept 21 2012
You will have to look up the entire article but gold miners in toto have spent more than the cash they generate. The gist of the article is that miners have vastly underperformed gold itself. Gold is getting more and more expensive to mine, the cost exceeds the benefit.
I hope I have made my concerns clear, a final spike higher probably lies ahead but is likely to be followed by an even more vicious spike lower.
Semi Conductors are the heart of pads, laptops and phones, welcome to the electrified economy. With stock indexes and gold climbing higher the poor performance of SOX is another sign of an impending top. We have pointed out that various markets top at different times, here is another example. But the big point is that weakness in the Semis is a red flag for the overall economy.
Intel and Texas Instruments look just awful. Not good. Markets are quiet again this morning, does a final burst up lie ahead? We will continue our more frequent updates.
I am thinking that at this juncture it may be a lot easier to start scaling in buys on HDGE,. If the markets collapse over the next two years as we think, is much easier on our mental state to start top picking after a four year market run up, than tuning in daily to Bloomberg TV to see if we overstayed our welcome in markets that are already flashing overbought signals.
I will have more on managing risk, and a look back at the 1973-74 meltdown thanks to information from our friends at the Socionomics Institute.
Seriously it has been most gratifying to hear from readers across the entire USA this week. We welcome all correspondence and especially your construtive suggestions. And on the revolver map at the top left on the blog, one can see our reach expands overseas.
Thanks for reading The Market Perspective.