The global debt crisis which worsens by the day requires liquidity. Have no doubt, if liquidity is needed to preserve the status quo, either real or illusion, it will be provided. Liquidity will feed hungry balance sheets around the world and send asset prices soaring into 2015. This includes stocks, commodities, and precious metals.
Rising stocks prices as viewed as a resumption of an economic recovery will be interpreted as positive development. Rising commodities, which includes gold and silver, well, that’s not so good. Their rise, however, will be explained away as weather-related, but ultimately their rise will be accepted as the return of the wealth effect.
While the green box mostly likely represents the hopes, dreams, and/or expectations of those behind curtain, it does not necessarily reflect a forecast or likely immediate outcome. The difference between hopes for and actually gets is often quite large when the outcome depends on the management of unmanageable capital flows. Besides, the ebb and flo of capital will soon turn favorable for gold (table).
The paper pusher’s window of liquidation, thus, will soon be closing. Those that spit into the wind in this business run out of money quickly.
Table: Risk Free Monthly
This morning started off well when I saw your email on my phone and read your most recent charts and commentary “Pressure and Energy…”
In looking at them, I found I have a couple of questions for you.
1. Do you expect that Commercial Trader net long % to approach or exceed the past high of -12.87% before we see our lift off in gold? Your green box target area implies that.
2. Your Diffusion index reading of 73 looks like it could push higher to approach 86 or so. Do you agree?
3. The Long/Short Concentration Index is looking good, isn’t it? Are you expecting one more push down to that lower trend line, or has 1600 been cleared for good?
In reviewing past articles of INSIGHTS (which is required reading for me every day), I located a couple of my other “favorite” charts that I am curious about, and hope that you update soon:
1. Is your Z score for S&P Gold approaching -3 yet? That was the low in 2008 that your last chart showed and marked a great entry point.
2. How are the gold lease spread composite numbers now? Are we getting close to positive?
3. Is the GLD Total Assets WA Stochastic up to 50 yet?
It least you can tell I am reading you, right?
Have a great weekend!
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