About 25 cents of the price change yesterday was dividend--Yahoo is terrible in keeping track of this. So the low for this cycle now goes to about 6.76 on a dividend adjusted basis and the low in 2008 is around 5.45 now. Eventually it will be reflected in the daily price tables here, but never in the Yahoo charts as they are not adjusted for divis.
Not that it all matters much as we are so used to old reliable going down, whose to know ? :)
Ratio (GOLD:XAU) black candle spiked similar to today on Nov 10--put a little more on BGEIX today--will be back to a Franklin a day as long as it is below 8, tomorrow. Could be a higher low forming, but no real conviction :).
Since January 1 2005 up to December 19 2014, BGEIX had 2511 market days. Adjusted for dividends, price was over 19 for 474 days during that trading period. Adjusted for dividends it was under 10 for 492 days. The first time during that time frame it went over 19 was on March 5, 2008, when gold was priced at about $980 per share--it closed at $19.03 that day. On December 19, 2014 BGEIX closed at 7.69 per share.
GOLD:BGEIX ratio was about 52 in March 2008 and was 157 on December 19 2014. This absurd, but its also absurd that BGEIX is now worth 40% of its March 5 2008 price with gold significantly higher.
Someday this will be adjusted--still buying at prices under 8 here, everyday.
New all time high for the GOLD:XAU ratio yesterday showing a intraday surge to 19.11.
the close at 18.63 for 12.15.14 is lower than the Nov 5 close of 18.97.
There is a chart pattern called three peaks and a domed house that the GOLD:XAU resembles. In the dome part of the pattern we may be tracing out 23 right now.
I'm still buying small chunks of BGEIX on this weakness--well the smallest you can, daily. Don't know when things will turn. We have gone sideways since last December with plenty of volatility and we are now playing around in the 7's while we were in the 8's at this time last year. Remember 5.70 was the bottom in 2008 on a dividend adjusted basis.
Time for a change and an end to gold stock under performance of gold since 1967, but may have to wait for Ms. Janet Felon and the boyz to finish the jibber jabber on Wed.
" Personally you have to be averaging into weakness because the miners don't just pop a little when they pop!!"
Fast forward a year--slightly below where we were a year ago--comment above from my Dec 14 2013 post. Yeah, they've popped and dived, but mostly just gone nowhere. So there has been plenty of time for averaging :)
"When all the sellers have been either manipulated or scared out of the market, that leaves only buyers."--Absolutely
Q: The other day Cramer and the rest of the CNBC clown posse was ripping the Apple traders that sold Apple all at once at the open. They never say a peep about the traders dumping gold at the open, close, and during the day, like GDX on Wednesday PM near the close. See no evil there?
Fleck: Well, they are just cheerleaders - not objective analysts of events.
Q: It seemed like there was a mini "flash crash" in GDX and related underlying stocks in the last minute or two of trading on Wednesday. Did you notice this and if so do you have any idea what caused it?
Fleck: Someone pointed it out to me, I have no idea why or what it means - mostly likely it is just computer generated noise.
Ask the magic eight ball:
Q. Is there a good or bad future for GDX based on the flash crash on Dec 3?
Magic Eight ball: Outlook not so good
There you have it--eight ball is smarter than Fleck and right so far today.
Draghi said they discussed purchasing everything BUT gold. So all that debt is far superior :)
"A choice must be made between the natural stability of gold and the honesty and intelligence of the members of government, ...... I advise you, as long as the capitalist system lasts, vote for gold.” - George Bernard Shaw.
"The last duty of a central banker is to tell the public the truth" - Alan Binder Federal Reserve Board Vice Chairman, Nightly Business Report 1994
Could be a good sign--bankstas running deep stops to help cover their shorts. Similar to the running of the stops in silver Sunday night bringing that down to 14 or so.
Wow with silver hitting 14.10 on the Dec futures contracts last night, how many long stops were triggered? My guess is all of them. Ain't nothing but air ABOVE us now. When you get this kind of blatant 100% belief that prices will only go lower--look out above. :)
Of course we have had plenty of false tops in the ratio since 2011. This one may be too and any move above 19 will be just a move higher in the parabolic surge that has devastated the miners. On the other hand there does seem to be a limit in how far gold and related stocks can fall. In light of the massive wealth creation out of thin air that has been going on since the 1913 Fed creation and the acceleration of the trend since the 2008 crisis we may be at peak manipulation by the CBs, and whether they can firewall all that bad debt and buy it all up like they did with the GSEs and most US mortgages remains to be seen. For anybody who sees a limit and sees the demand for PMs from anti-US dollar interests staying under production costs for PMs seems unlikely. But full manipulation sez anything can happen in the very short term.
Dramatic losses on Friday, Nov 28--was thinking 7.50 - 7.60 on BGEIX as we test the GOLD:XAU ratio top around 19. Looks like we head back toward 7 again before we know if the parabolic advance in the ratio continues. Judging by the action on Friday, we will certainly know something by Dec 5 or at least thereabouts. There is absolute glee on the part of the perma-bears on gold that I read. I don't think any target below where we are now is realistic, because it will just move lower, if gold continues to move lower.
It might be good to watch IWM as an indicator to see if the ramp in general equities will continue. Its strong today, while the bigger names aren't so much. If IWM should break out above its its 121 high--its about 118 now, looks like the ramp will continue. I doubt if that would be the best thing that ever happened to gold stocks. Of course I am watching the GOLD:XAU ratio and have mentioned that 19 level there as something we want to avoid on this bounce. Continued ramp in GEs probably means gold stocks going no place at best. We shall see.
I'm not changing much--just pointing that out. Was reading Fleck today and one of the regulars (Mr. Skin) was saying VXX was a good play on volatility--heck that is just poison and no matter what happens, the decay there will make plenty of money for bankstas shorting it--not much else.
'Sudden drops in bond prices are becoming more dramatic because new capital rules are making banks who act as dealers less willing to hold on to bonds while they look for buyers, according to Neil Murray, the global head of credit at Aberdeen Asset Management Plc in London, which has about $519 billion of assets under management.
“Historically trading desks acted as a buffer, nowadays they are in no mood for taking bonds on their balance-sheet given the constraints they are under,” said Murray. “When bad news comes out, they mark debt down dramatically.”'--Bloomberg Nov 21 Junk Bonds Whipsawed as Trading Drought Rattles Investors
No change and everything still pointing to another high in the gold:xau by Dec 5 or thereabouts.
Things starting to heat up in bond land--junk yields going up and corporate to tresaury yields widening
These kinda stories make me think the end of the run isn't far off but even the most die hard stawk bears are saying something has to give this week
"It all comes down to what happens this coming week. Recall the October monthly hanging man candle. By my calculations (positioning in the topping process and analogs) November should accordingly end down. That means we should see at least a 3% drop in equities this week from last Friday’s close. What might cause that? Exhaustion, I believe. See the mid-September topping candle in the first chart above, compared to Friday’s. A similar candle from a similar all-in / stocks can only go up positioning, and a sudden switch to bears in control followed."--Solarcycles blog
Its all a matter of when the big one happens and the apple cart REALLY falls over and all the debt we are built on can't be put back together. Gold and gold stocks should do well in that environment, but can't say when--can wait though, and if this is 1928--then November 1929 is surely a comin. Until then its all noise .
If the GOLD:XAU topping process plays out anything like the 2008 process, there would be 12 market days to the secondary top--that would put us squarely at Dec. 5 or unemployment report day for that next top--which one would hope would be lower than 19, but time will tell. Well at least miner fans would hope. Whateva happens, happens.
The bounce of the ratio begins--we will hold on to our hats (tinfoil??) and see how high we will get--of course anything exceeding 19 will mean we are still parabolic on the gold:xau--while it seems unlikely, the whole bizarre market scene is most unlikely at this stage :). Remember we have had almost exact double tops in the ratio--2000, being one good example--although at much lower levels.
We are in the 40-50 day MA zone now, so the ratio might bounce from here--Nov 18, 2014, or somewhere close. We shall see. If and how high--not to know. 2008 big bounce--retraced around 2/3 of the ratio drop. Before that in 2000 and even as far back as 1995--things were a little more tranquil--the ratio range was nowhere near as extended as now--the ratio made a true double top in 2000 around 6.4, which seems tame now, after not even reaching the 40 day MA. In 1995 there were several bounces, but from the area of below 3--it recently got to 19, so looking back at that ancient history is little help, methinks.
"Dismal Science" Fiction
Someday we will look back on this period and shake our heads at how gold was literally being given away while at the same time folks were falling all over themselves to lend governments money at a discount to the actual rate of inflation, and the central banks were telling us they were determined to precipitate even more inflation. If this scenario were written in a novel, no one would believe it, but that is where we are.