To break the world monetary system, that will ONLY take place with a rising dollar. But with a declining outcome thereafter. You are just missing that part that FIRST the dollar must soar to screw up the world to create the change in the monetary system and that illogical proposition is in fact what makes it happen. Forget about petro-dollars. They are history. ..
Don’t worry. Just go with the flow. It’s happening fast. Just let go off the old-world theories. The reserve status of the dollar cannot be changed by pricing oil in even rubles or yuan. The reserve status is created by the fact BIG MONEY can park in US debt. It cannot park in European debt which remains in chaos outside of Germany. Britain, Canada, Australia are too small, Japan is too restrictive, and China as well as Russia are not quite ready for prime time. The debt has to turn belly-up in the fish bowl to change reserve status. It is not even something the USA, China, or Russia can decree.--M Armstrong
Gold at the bottom of its recent range is a topic on the Traders Talk Commodity Board website. There is an interesting chart there showing the average gold price and the Fed Funds rate for many years back. I would link of course but impossible on Yahoo message boards as all linked messages are deleted.
While the message here is something entirely different, that gold can rise even when the Fed Funds rate is going up, the unintended message is that gold's average price may be following interest rates in a somewhat scary correlation and that all assets and Fed Funds rates, for that matter have strong support around zero :)
I would consider BGEIX again under 6 and ACITX under 9.5 and HDGE under 10--til then it is safer in cash while holding a small miner position if the bull keeps chugging. Doubtful with the hanging man on the BGEIX weekly, the DXY surge and the speculators reaching for DUST to hedge their big gold bets, but anything is possible.
"Gold has been backing off with the prospect of rising interest rates, but a weekly closing below 1225 will signal that the high is possibly in place. However, a weekly closing below 1205 will signal that a serious decline is likely. Technically, we can see critical points at 12434.47 and 1202.13, and a closing below 1202 will signal serious trouble for gold. Gold needs to close above 1265 today to keep it alive near-term. Closing below that price level is neutral and a close below 1230 is bearish just from a tech perspective. A close beneath 1225 will warn correction ahead.
To answer all the questions coming in how the gold promoters are burning people at the stake, they cheer every rally. They never say sell. It is always the same thing – up, up, and away no matter what else is happening in the world. They pitch each time this rally is real but lack any sense of where gold fits within the global scheme of market movement. Everything has its time and place. Gold will breakout, but it requires the collapse in public confidence. We are just not there yet. Trump and Bernie illustrate that this is coming.
Nothing has taken place to negate the prospect of new lows. Markets typically have to move to extremes on both sides to trap people. That is the character of markets – ALL MARKETS. It is human nature we are talking about. My dispute with gold promoters is that they use the same nonsense stock brokers did during the Great Depression – just buy and hold, it will eventually make new highs. In the case of the Dow, it took 25 years for 1954 to exceed the 1929 high. In real terms, it was 1966 adjusted for inflation that produced new highs."-M Armstrong
Just as a related thought, over the past 10 years, BGEIX has been below 6 on a dividend adjusted basis for 4% of its trading days. So if you wait til under 6 to buy, historically, you will not be overpaying. That is 102 days under 6 (dividend adjusted) of the 2517 trading days over that period, from May 20, 2006 to May 18,2016.
You can look all of this up on the historical prices part of this BGEIX site.
Looks like a quiet summer of watching the Gold:BGEIX ratio climb again. I'm down to 13% allocated in PM related including BGEIX in the AM Century Funds (retirement). Most of the rest is cash now.
Two big things--The US Dollar index has what looks like a bullish engulfing candle for May--this seem to be pointing to a rising dollar in coming months, perhaps over the 100 level on its index. Certainly significant for anti-US dollar investments like BGEIX and ACITX , as well as ASIOX, both of which I closed out on Tuesday, May 17.
The volume in DUST (leveraged anti-PM ETF) was amazing yesterday 5.18.16. This shows the full extent of the bullish bets by speculators in gold and related investments and this reach for a hedge shows how much will be unwound in the next few months. As all of this tends to overshoot, a move toward 200 on the Gold:BGEIX ratio is not out of the question and remember a 200 reading there would result from a gold price of 1000 and a BGEIX price of 5, which would be another low.
I could be wrong and I am keeping a minimal amount of the miners and PM related, for me anyway, as I stated above. But I wouldn't touch BGEIX again until under 6, which may be soon, if the US dollar gets cranking, or may be never. We shall see.
Special update--whoops :)--oh well--at least we took off a lot of risk in front of the Fraud Fed's Minutes. In the grans scheme of things, the Fed manipulates everything and remember that gold stocks have that pesky "stock" moniker attached to them.
Sold and selling more today--from Jeff Kerns about nails it:
"When the "melt-up" phase ends, history indicates that the decline should be quite horrendous and go back down to a 92-96 index sell signal that ends the 92-96 index's bull market buy signal from January. And then another rise is supposed to occur because the very long-term indices are bullish. Long-termers can remain bullish, but very few people will have the stomach or the desire to remain long during a major decline ..."
92 day moving average on the daily for BGEIX is 7.93 as of 5.16.16. We closed at 10.45 that same day. That would be a 25% decline from yesterday, but just like with the ratio plunge--the miner moves tend to overshoot! Time to shut up and let the market work its magic, whatever that is--will check back nest week.
Ratio update (based on the weekly Gold:BGEIX chart)
We plunged from a high of 205.52 on the ratio in November 2015 to 116.27 in April 2016--possibly one of the sharpest plunges in history and exceeding my December 2015 forecast of 130 by a great deal. After not reaching 30 on the 2 week RSI index, since 2003, we have been under 30 for about a month. The USD chart at finviz is interesting--the commercial shorts had been lessening and are now they are turning more short. This happened in 2014 and hearkened and big move up in ole Uncle Bucky.
Most recent article I read from the Bismarck Tribune (North Dakota), seemed to be saying it was the usual kicking the can down the road. Pensioners were happy, but described it as only winning a battle in the war.
30 year season chart for gold shows it peaking mid-May and then moving swiftly down into early July--much better after that. Go away in May and get back in on the 4th of July? Maybe--have a good WE.
The seasona chart can be googled through Seasonal Charts Classics Gold--since you can't link anymore here.
In AM Century retirement accounts at close 5.12.16:
Miner ETF'S 8%
Other Miner Mut. Funds, Stocks 4% 30% total in miner/PM related
(inflation bonds,non dollar currencies, commodities) 2%
ACITX (inflation indexed bonds) 4%
Capital Preservation MMF 61%
Seems like 30% is comfortable at this point--considering the recent rise in PMs and miners.
See weekly candlestick chart for BGEIX at sharpcharts
What is a 'Hanging Man'
A hanging man is a bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off near the market open, but buyers are able to push this stock back up so that it closes at or near the opening price. Generally the large sell-off is seen as an early indication that the bulls (buyers) are losing control and demand for the asset is waning.
Buy back area 7.5-9? We shall see. Nobody KNOWS the future.
Selling another $25K of BGEIX today. Still very bullish long term and still have plenty along with other miner related in the brokerage to take advantage of more extended move, but I have my doubts right now. No clue on the future--volatility is indeed increasing.
"Here’s the bigger picture: The PBGC, the nation’s safety net for failed pension, has total assets of about $1.8 billion and liabilities of $44.2 billion for multiemployer plans such as the Central States fund.
A Central States failure would not only substantially reduce benefits for every worker, retiree and survivor in the Teamsters plan, but wipe out the safety net for all Americans. Among the Central States pensioners at heightened risk are the 270,000 pensioners already targeted for cuts as well as about 130,000 others who had been sheltered due to age or infirmity. And that’s why Treasury’s blanket rejection of the Central States’ application was imprudent, incorrect, and inappropriate."
From Marketwatch--getting started before Hitlery even gets in! Banksta Gangstas--all Politicians from the same crowd.
94 day moving average on the daily chart for BGEIX is at 7.61 (5.6.16 close). That would be a 2/3 fib retrace of the entire move up--not unheard of but certainly requiring of a "stomach." That would take us well below that below 9 gap on the weekly BGEIX chart.
"When the "melt-up" phase ends, history indicates that the decline should be quite horrendous and go back down to a 92-96 index sell signal that ends the 92-96 index's bull market buy signal from January. And then another rise is supposed to occur because the very long-term indices are bullish. Long-termers can remain bullish, but very few people will have the stomach or the desire to remain long during a major decline (that should exceed most analysts' expectations) when the melt-up phase ends and the gold stocks decline into a 92-96 index sell signal over months."--Jeff Kern from the 321gold site.
Much like CONgress changing the mark to mark regs to mark to unicorn for the banks in early 2009, so bankstas could lie legally about their assets' worth and everyone could feel good again while Benron added the QE broth to the soup. Its the Tinkerbell phenom. Clap if you believe and really what do they all have left in CONgress and the Fed. Taint over til its over, though! The ship of fools----entertainment provided by Hitlery and You're Fired. Woohoo!
Fascinating chart on the *day divides the night* blog on tumblr, concerning the Gold to Monetary Base ratio--we have a long long way to go, in this bull run, regardless of any short term corrections.
Try to run, try to hide... LOL