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March 21 2019

moneymetals

As The Markets Sell-off The Precious Metals Rebound


To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.

However, even though we could see a late-day rally in the markets, and even higher stock indexes over the next few months, the bear market for stocks is still coming. The Dow Jones Index has now suffered two large sell-offs in the past ten months:

Dow jones - oct. 10, 2018

In January, the Dow Jones Index fell by more 3,000 points, and the current correction is only one-half of that amount. So, I expect to see a continued correction over the next month. Because October is the worst month for market Crashes, this could be one hell of a blow for not only the economy but also, for investor confidence.

For example, according to the Zerohedge article, Used-Car Prices Plunge Most In 15 Years:

CPI - used cars & trucks mom

Looking deeper at the core inflation print, it reflected a 3% monthly drop in prices for used cars and trucks following increases in each of the last 3 months, and the biggest drop in 15 years…




Continue reading: ​https://goo.gl/r8VZYJ

March 07 2019

moneymetals

Insane Stock Market Rally Due To Massive Global Monetary Liquidity

If you’re puzzled by the magnitude of the stock market correction since late December, you can thank the central banks for the rally. Yes, that’s correct… after the Dow Jones suffered the worst Christmas Eve trading day ever, the massive central bank monetary liquidity helped push the index up 20% from its low over the next two months.

Dow jones (daily chart) - february 28th, 2019

Of course, the markets were due for a reversal as nothing goes down in a straight line, but to see the sort of buying in the face of negative economic news and lack-luster earnings means that the inevitable CRASH will be even bigger when it finally arrives.

Now, according to the article, Back To Fundamentals, Daniel Lacalle stated the following in regards to the markets:

In 2018 we saw the first drop in global liquidity in more than a decade, and that generated significant losses in financial markets. Since the end of December stock markets have rebounded strongly because the data, although poor, is not as bad as feared, and mainly because the Federal Reserve changed its tone on the number of rate hikes, the ECB announced that it would be much more accommodative and the Central Bank of China introduced the largest injection of liquidity in five years.

In fact, between December 26 and February 15 we have seen the largest injection of liquidity in the markets of the last two years, bringing the global money supply to record levels.

The two key points stated above were that a drop in global liquidity in 2018 generated significant losses in the financial markets and the largest injection of global liquidity from December 26 to February 15th brought the money supply to a record level and pushed global stock markets back higher. 

Continue reading: https://goo.gl/oApVJ9

February 28 2018

moneymetals

February 14 2018

moneymetals

Huge Market Correction Update & Silver Price Trend

While the Dow Jones Index and broader markets are recovering from their lows set on Friday, the worst is still yet to come. Investors need to realize that stock market indexes don’t fall in a straight line. Also, there is also the possibility that the Dow Jones Index could surpass its previous high of 26,600 points. Only time will tell.

However, the leverage, margin and insane valuations in the markets are still in way out of whack. Just because the Dow Jones Index has added 1,200 points from its lows in early Friday trading, it is still 2,000 points below its peak of 26,600. Furthermore, when the Dow Jones peak at 14,100 points in 2007, it took six months and three different peaks before the index started to fall off a cliff in 2008.

For example, the Dow Jones Index hit three peaks in 2007:

  1. July 2007 = 13,900
  2. Oct 2007 = 14,100
  3. Dec 2007 13,600

Over that six month period in 2007, the Dow Jones Index rose and fell three different times. The biggest percentage drop was between July 2007 and Oct 2007, at nearly 10%. However, the Dow Jones index peaks were at the most, 3.5% from their high of 14,100. Moreover, it took six months for the Dow Jones Index to finally head lower on a sustained basis and it wasn’t until nearly a year later in Oct 2008 did the market finally crash.

So, if you think the Dow Jones correction is over, then you are going to be in for a rude awakening.

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