www.silverdoctors.com
Submitted by Stewart Thomson:
1. After surging towards $1300, gold is taking a well-deserved short term rest. Can the rally continue?
2. Geopolitics news has gotten most of the credit for this rally, but Indian dealers have been buying huge amounts of gold in preparation for the April 28 wedding season Akha Teej celebrations.
3. Over the past two months, that’s
where most of the demand has come from. Western analysts and investors
often forget that Indian buyers follow Western news very closely. In
fact, I would argue that India’s top gold traders are more in tune with
gold-related news in the West than many Western analysts.
4. For example, gold surged
higher on the night Donald Trump was elected because Indians bought gold
maniacally when they realized Trump was going to win.
5. Their frenzied buying took gold to about $1340 that night. It continued until the Modi government stunned the buyers with a cash notes call-in.
6. The latest surge in Indian dealer
buying appears to have peaked last week, but there are more key events
that sit dead ahead in the Western news pipeline.
7. That could mean there will be no more than a short and sweet pause in both Indian and bank FOREX trader demand for gold.Double-click to enlarge this fabulous “Uptrend of Champions” gold chart.
9. After pausing in mid-February as
Chinese New Year buying peaked, gold carved out a nice inverse H&S
bull continuation pattern, with a neckline in the $1270 area.
10. Indian dealer “thunder buying”
blasted gold over the neckline and towards the $1300 round number
resistance area. It’s unknown whether gold will pull back to the $1260 –
$1270 neckline area now. If it does, I’m a happy buyer of more gold,
silver, and related stocks!
11. Gamblers can also buy now rather
than waiting for the pullback. It can be done with small size via call
options and other gold gambling products.Double-click to enlarge what I
believe is the greatest bull wedge chart pattern in the history of
global markets. If there was ever a realistic opportunity for investors
to “chase price” in the gold market, I’ll dare to suggest…. it is now!
13. Incredibly, Akha Teej wedding day is April 28, and the next US debt ceiling deadline is also April 28!
One powerful gold price driver is fading in importance, but only as
another arrives! For all practical intents and purposes, the US
Treasury can probably fund operations using bookkeeping tricks to keep
spending at the ceiling limit until the fall.
14. Congress is on holiday and it’s
unlikely they will do anything other than pass an “extraordinary funding
measures” bill to allow the debt ceiling can to (yet again) be kicked
down the road.
15. Institutional money managers are
becoming more nervous about the lack of any real action plan to reduce
the ceiling, and that will continue to be supportive for gold.
16. Also, first round voting in the French election begins on April 23, just five days from now, and Iranian elections are in mid-May.The US dollar has finally arrived in my
107.50 target price area against the yen, hitting about 108.30 A rally
in the “risk-on” dollar now though, is more likely to be accompanied by a
US stock market rally than by a big decline in gold.
18. Some gold stock enthusiasts are
not aware that the GDXJ ETF is undergoing some portfolio rebalancing.
The fund has reached regulatory limits in the amounts of shares it can
hold in some companies. That’s causing some temporary selling in some
well-known gold stocks, and buying in others.
19. Investors need to ignore this
short term noise. In the big picture, gold and silver stocks are
performing well. Still, it will take more rate hikes to reverse US
money velocity and generate the kind of inflation that causes these
stocks to stage enormous outperformance against bullion. That scenario
is coming, but it’s a few years into the future.After bursting up from a beautiful
symmetrical triangle pattern, silver is consolidating like a champion
above the demand line of the pattern.
21. Gamblers and long term investors
can both profit nicely from the upside implications of this pattern.
Investors who own no silver now should use the current breakout and any
pullback to make purchases.
22. I always suggest owning physical
bullion first, and then diversifying into other types of silver market
investing once that has been accomplished.GDX has been pretty much unaffected by the GDXJ rebalancing, and is making a beeline towards the $25 – $26 area highs.
24. I expect a breakout above that key
price zone will be followed by a surge to $31 – $32 before there is a
significant “price correction”. The bottom line: India demand was
strong on US election night. It has been even stronger during the
geopolitics-themed rally since mid-March. I expect that as Diwali
buying begins in the fall, Western gold community investors will see
Indian gold demand reach even greater heights, and that should
indirectly produce a significant increase in the value of most of mining
shares!
2017年4月19日 星期三
BEARS BEWARE: Here Is What Both The Bulls And Bears Need To Be Aware Of Right Now
kingworldnews.com
As markets open for trading across the world after a long 4-day weekend, here is an incredibly important look at what both the bears and the bulls need to be aware of.
King World News note: Below is a tremendous piece that Jason Goepfert at SentimenTrader wrote at the end of last week’s plunge in the Dow that predicted stocks would rally and rally they did. It’s an important piece because it has some key charts that accompany it. Yes, Jason correctly predicted that stocks would rally — but it’s the big picture that really matters.
From Jason Goepfert at SentimenTrader: The uptick in fear is “irrational”. Options traders are pricing in future movement in the S&P 500 that is more than twice as much as it has been moving lately, and they expect that movement to begin imminently. When we’ve seen that combination over the past five years, stocks rallied strongly in the days and weeks ahead…
“Irrational” Fear
Yesterday, we took a look at times when options traders seemed to be getting nervous even though stocks have been in a solid uptrend.
There is a bit of irrationality in the jump in volatility expectations, at least in relation to how volatile stocks have been. The VIX is pricing in movement for the S&P 500 that is more than double what it has been showing lately. So options traders are not only expecting a huge jump in volatility from what we’ve seen lately, they also expect it to happen imminently.
The chart below shows every time since 2005 when this combination has triggered (it didn’t trigger prior to 2012). The arrows highlight times when the VIX was more than double the S&P’s recent historical volatility and when the VIX Term Structure was greater than 1.0.
Obviously, the trend since 2012 has been super, so positive returns are expected. Even so, after these signals triggered, the S&P returned an average of +3.7% over the next week, with all of them positive. Over the next month, the S&P didn’t suffer any loss greater than -1.2% at its worst point after any of them, and it gained more than +6% at its best point after all of them.
This bit of “irrational” fear should lead to higher prices, and if it doesn’t happen almost immediately, then we’ll have some evidence that character of the market is changing from what we’ve been seeing.
Emotional Selling In The Futures
Thursday’s trading showed slight evidence of exhaustive selling. The S&P 500 gapped down at the open, closed lower than that open and at a nearly two-month low. All while still trading well above its 200-day average, which is unusual.
All similar occurrences in the futures are shown below. Note the one-month returns, during which the S&P rallied 15 out of 16 times and enjoyed a more than 5-to-1 reward-to-risk ratio. Emotional selloffs during strong uptrends have not often turned into lasting pullbacks.
More signs of exhaustion. Both the put/call ratio and Arms Index jumped to extreme levels on Thursday.
6-Month Equity Put/Call Ratio
When the p/c ratio was above 0.9 and Arms above 2.0 while the S&P was above its 200-day average, it rallied over the next week all 6 times, averaging 1.6%. When it was below its 200-day, it still rallied 56% of the time but suffered some large losses. Context matters.
King World News note: The bottom line is that the bears need to be extremely careful with this market. As Jason stated, here is the key:
King World News note: Let’s see how the market trades the rest of this week and into next. It will provide the answer as to the real trend for both the bulls and the bears.
As markets open for trading across the world after a long 4-day weekend, here is an incredibly important look at what both the bears and the bulls need to be aware of.
King World News note: Below is a tremendous piece that Jason Goepfert at SentimenTrader wrote at the end of last week’s plunge in the Dow that predicted stocks would rally and rally they did. It’s an important piece because it has some key charts that accompany it. Yes, Jason correctly predicted that stocks would rally — but it’s the big picture that really matters.
From Jason Goepfert at SentimenTrader: The uptick in fear is “irrational”. Options traders are pricing in future movement in the S&P 500 that is more than twice as much as it has been moving lately, and they expect that movement to begin imminently. When we’ve seen that combination over the past five years, stocks rallied strongly in the days and weeks ahead…
“Irrational” Fear
Yesterday, we took a look at times when options traders seemed to be getting nervous even though stocks have been in a solid uptrend.
There is a bit of irrationality in the jump in volatility expectations, at least in relation to how volatile stocks have been. The VIX is pricing in movement for the S&P 500 that is more than double what it has been showing lately. So options traders are not only expecting a huge jump in volatility from what we’ve seen lately, they also expect it to happen imminently.
The chart below shows every time since 2005 when this combination has triggered (it didn’t trigger prior to 2012). The arrows highlight times when the VIX was more than double the S&P’s recent historical volatility and when the VIX Term Structure was greater than 1.0.
Obviously, the trend since 2012 has been super, so positive returns are expected. Even so, after these signals triggered, the S&P returned an average of +3.7% over the next week, with all of them positive. Over the next month, the S&P didn’t suffer any loss greater than -1.2% at its worst point after any of them, and it gained more than +6% at its best point after all of them.
This bit of “irrational” fear should lead to higher prices, and if it doesn’t happen almost immediately, then we’ll have some evidence that character of the market is changing from what we’ve been seeing.
Emotional Selling In The Futures
Thursday’s trading showed slight evidence of exhaustive selling. The S&P 500 gapped down at the open, closed lower than that open and at a nearly two-month low. All while still trading well above its 200-day average, which is unusual.
All similar occurrences in the futures are shown below. Note the one-month returns, during which the S&P rallied 15 out of 16 times and enjoyed a more than 5-to-1 reward-to-risk ratio. Emotional selloffs during strong uptrends have not often turned into lasting pullbacks.
More signs of exhaustion. Both the put/call ratio and Arms Index jumped to extreme levels on Thursday.
6-Month Equity Put/Call Ratio
When the p/c ratio was above 0.9 and Arms above 2.0 while the S&P was above its 200-day average, it rallied over the next week all 6 times, averaging 1.6%. When it was below its 200-day, it still rallied 56% of the time but suffered some large losses. Context matters.
King World News note: The bottom line is that the bears need to be extremely careful with this market. As Jason stated, here is the key:
This bit of “irrational” fear should lead to higher prices, and
if it doesn’t happen almost immediately, then we’ll have some evidence
that character of the market is changing from what we’ve been seeing.
King World News note: Let’s see how the market trades the rest of this week and into next. It will provide the answer as to the real trend for both the bulls and the bears.
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