Thursday April 25 2013
The one thing I am sure of is that The Great Recession has Begun as we announced a few weekends back. Here are 12 more statistics courtesy of Dave Rosenberg which back up that idea.
Here is an interesting comparison of why Apple is like Microsoft. I suspect this is the case. Both peaked and continue to make money but the growth era is behind them.
I and others were expecting a fifth wave within a third wave for gold. But as of this morning that has simply not happened. Gold is priced at 1445, above Monday night's 1438. Gold bugs report massive physical demand around the world. Here is a typical article about buyers in Singapore.
With a nod to Steve Kaplan, here is detailed explanation of what happened in the gold meltdown. The one thing I got from this article is that if world banks want to knock gold down, they can.
Weekly Gold
The bearish argument is that gold topped in 2011. Only a third of a third wave could be responsible for such a recent melt down. This suggests much lower prices ahead. Bears dismiss the physical buying as typical bear market psychology. Accustomed to buying pullbacks for the last twelve years, buyers rush in only to be disappointed.
The bull argument is the usual talk of too much paper money in the world. This was a concerted effort to knock down gold and convince the public owning gold or anything to do with gold, like mining stocks, is a bad idea. So far that has been pretty convincing. On this chart MACD is pulling back to 2008 lows. Volume was at an all time high on the sell off. For the first time since the bull market in gold began in 2000, the 200 week MA was breached. That can be a bull or bear argument.The month of April comes to a close next Tuesday. It will be interesting to see if gold can close over 1525.
Daily Gold
I have been thinking this move up was a fourth wave within a large third wave. That would suggest a final lower price back to the 1300 area. However, as many are pointing out, the 1450 area appears to be a break out level.
Central Fund closed at a -.2 % discount yesterday.
Apparently the bottom line is that the argument for a rally in gold near term is gaining legs.
Crude Oil Daily
Now look at the big move in crude oil yesterday. It certainly did what it needed to do. On the other hand, crude oil has failed twice at 98. Is this just a bounce off the lower side of a down trend channel?
No one knows, we will report as we gain information.
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