Bull Market Thinking – by Tekoa Da Silva
I had the chance on Friday to reconnect with technical gold trader Gary Savage, publisher of the “Smart Money Tracker” daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.
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. So when [the] regression occurs, it’s going to be an extremely violent move back towards the 200 day moving average, and like I said, I think what will trigger this [move in gold], will be the stock market crash, the Fed, and the central banks’ response to [the] unraveling…[it’s] what I imagine would happen before the bubble phase begins.“
When asked about the small signals investors should look for in gold and gold equities to identify an early start to the bubble move, Gary said, “At some point the selling exhausts…and [when] the liquidity starts to flow into that area…value investors [start] coming in, and then you start to get these 5%-6% days, and [the] next thing you know you’ve got an 11% week, and then the momentum starts to shiftand then you get a buying panic into the area where people are making money…So I think we have a [perfect] setup for the bubble phase in gold.”
As a final comment Gary advised further patience in holding gold equities, saying, “They may temporarily follow [the market] down, but they’re going to rebound out of that extremely violently, and leave the stock market in the dust.“
——
This was another powerful interview with one of the world’s most successful gold traders, and is required listening for investors looking to profitably trade this gold bull market.
To listen to the interview, click the following link and/or save to to your desktop:
>>Interview with Gary Savage (MP3)
To learn more about Gary and follow/support his work, visit: Smart Money Tracker
Enjoy the interview? Please support the site by sharing this URL page link with friends, family, and your favorite chat forum.
Thanks,
Tekoa Da Silva,
Bull Market Thinking
Gary Savage is wrong. Djia on Friday sold to Rsi 50. New POMO schedule came out last late Fri. Fed still printing like mad. I say, buy the dip, or buy real assets (gold for example). Fed is not ready to taper yet. Sell in may and go away need not apply. Flat on Monday, up and away on Tuesday to new breakout possibly this week. I could be wrong, but time will validate. My money is still in.
No matter what you hold in paper wtshtf you’re screwed. You don’t hold metal, you don’t have squat. This guy’s clueless or he’s hawking paper crap.
I am hoping silver prices stay down like they are because I ain’t done stacking yet. If it goes up much it would put it out of my reach. Right now, I can afford 1-2 oz’s every other week. When I can find it locally. Ammo and silver and local raw honey are what I keep my eyes open for these days.
Like so many others, Gary Savage’s prediction of a market crash is based on the mistaken premise that a free market exists. Today, logic, history, technical analysis, or even fundamentals, no longer apply to American stocks, bonds, or real estate. The only thing that matters is the Rothschilds, Rockefellers, related clans, and their Federal Reserve puppet. If their interests are served by bringing the S&P 500 to 2,000, 2,000 it will be. If their interests are served by crashing the S&P 500 to 600, 600 it will be. As in 1929, most of the speculators who escaped unscathed were people like Joseph Kennedy–who were advised ahead of time of the Fed’s intentions. With precious metals, the fundamentals might or might not one day overwhelm the international bankers. With stocks, as long as these bankers rule the USA, never.
After the SHTF alcohol, cigarettes, coffee will all be good trade items
The illegal and immoral Fed is injecting at least 85 BILLION a month into those ‘Too Big to Fail’ Wall Street banks to get that toxic CDS and MBS slop off their ledgers, and the Fed can’t stop, since if they did, it would cause the stock market to crash, bringing down the economy.
If they keep issuing all that ‘funny money’ each month, it won’t be long before the USD is basically worthless, and what happened to Germany in the mid-1920’s will happen here; hyperinflation and people starving to death because they can’t afford to buy food.
But there is a 3rd choice and it involves taking back our government from the thieves, liars, con artists, freedom smashers, mass murderers and other jack-booted thugs that have stolen our nation.
It won’t be pretty, but it’s a much better option than letting the first one of the first two destroy this country.
P.S. Don’t be fooled by the so-called ‘housing recovery.’ People are investing huge sums of money into real estate, using that a way to invest their money. It’s not a real recovery.
Greg, you may have already read _When Money Dies_ by Adam Fergusson, if not, it’s a must read for anyone interested in this subject. Right now there’s a global rush into metals touched off by the Cyprus bail-in but that’s only being driven by the relatively few who are paying attention. One of the interesting things covered by this book is that when everyone realizes that a hyperinflation is upon them, panic buying of everything in sight begins just to get rid of the fiat money. Store shelves empty of EVERYTHING because holding ANYTHING real is better than holding paper. In Germany, foreign tourists joined in the buying spree because German goods were dirt-cheap when measured in any other currency. Those who know will have plenty of warning signs as things heat up.
When interest in _When Money Dies_ took off a few years back, the few copies of the old book were going for as much as $1,000 on eBay, but a reprint in paperback has brought it back down to very cheap and available again http://product.half.ebay.com/_W0QQprZ102915897
“When Money Dies: The Nightmare of the Weimar Collapse” is on my desktop to read whenever I feel the need to hear some common sense and not the bloviating of the MSM.
Adam Smith said, “The natural tendency of the market is to always equalize the price of a commodity with its value.” In other words you can’t buck the market.
Those pirates on Wall Street have found many ways that do buck the market but they can only be a temporary thing, however long temporary might be. I think all those new financial instruments were about delaying the inevitable crash as much as it was to rob us but no matter, the market will eventually equalize prices with real values, and when it does it will be so ruinous it will put an end to Western hegemony . It will be the end of an epoch.
Folks the bottom line here” Those who live by the Dollar will VANISH with the Dollar”