"It was a powerful conversation as Gary indicated the S&P 500 is at its most overbought level in nearly 40 years, and may crash 10%-20% within a few trading days as a result. Following this crash, Gary expects a massive central bank monetary intervention to create the “launch pad” for an explosive move higher in gold and gold equities, ushering in the final bubble stage of the bull market.
“We’re at a very important crossroads here,” Gary explained at the beginning of the interview. “The S&P 500 [broke] through 1640…and I expect we’re going to have some kind of crash, or semi-crash over the next 5-10 days…The selling is probably going to get huge…and it [may] take everything [down] with it.”
When asked why he’s expecting a crash of such magnitude to occur, Gary replied, “If you look at [a] long-term market chart…you can see that at the recent peak, [it] was stretched further above the 200 day moving average then it’s ever been in the last 30 or 40 years. So the forces of regression are going to be extremely powerful…We’re probably going to [cut] right through the 200 day moving average and [it] may make the 2011 correction look small [in comparison].”
This fragile equities market plays a key role in determining gold’s next move according to Gary, in that, “When it breaks, the Fed is going to freak out, [and] they’re going to double, triple, and quadruple down on QE to try and pump stocks back up, [and] that liquidity…[is] going to find something else…I don’t believe it’s going to pump up a double parabola in stocks…[It's] going to look for something that’s undervalued…and that right now is commodities in general, more specifically—gold.”
As to the consequences of gold being driven down so far when compared to this blow-off in equities, Gary stated that, “Regression to the mean not only works on the upside, but also on the downside, and gold is in the mirror position of the stock market—it’s stretched extremely far below the 200 day moving average. "
listened to an interview with King WorldNews with Eric Sprott, and he was saying that the bond market is in trouble, that it can't withstand the meager rise in interest rates, that's going to kill the housing recovery, gonna slow auto sales, and he also sees much higher gold prices here at some point, hard to say exactly when
Sprott thinks more data about a weak economy may be released this week so as to keep a lid on interest rates, man these markets are so manipulated and the flow of data so controlled, it's hard to trade this market, unless you just keep it simple and go long undervalued PM miners, that's my big idea (same as usual), one idea is gold, my other idea is silver, EXK mines both... GLTA
The average daily turnover in currency markets is about $4 trillion per day, but total global trade is over $20 trillion per year. So it's obvious that most activity has little to do with imports or exports. Investors and speculators determine interest beyond trade in-balances, capital flows and inflation.
I think that the probability of a June reduction to the $85 billion per month Fed program is very low. The continued extension to the US Dollar’s rally could prove to be overdone. So, due to stimulus and sentiment, the S&P 500 isn't in major jeopardy, either is silver.
News! I can't recall the reliable source I read this weekend which indicates a Federal Reserve balance sheet increase in "assets" of more than $110 billion/month of QE YTD. Contrary to popular belief, the Fed has been injecting more than $85 billion per month of QE (to infinity). As far as the S&P taking a major dive, who the heckfire knows for sure.