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Feb 21, 2012

1.  Most of you believe that a time machine is a theoretical device.
You might like to be able to buy gold at $250 an ounce today, but
without a time machine your dream cannot come true.

2. I’ve created a real time machine. It really works, and you can use
it to buy gold at $250 an ounce today. To use my time machine, please
click here now. [5]

3. You can’t go back in time and buy gold at its point of maximum
price sale, but you can look at other major markets and understand the
emotional strength required to buy them during similar price sales.

4. Oil bottomed at $10, while the major news media told you that the
oil supply glut was “here to stay”. Now they are telling you the
same thing about natural gas.

Let’s turn our attention to a cycle which we’ve rarely discussed
over the years. The Kress 24-year cycle is one of the components of the
120-year cycle series which is scheduled to bottom in 2014. The 24-year
cycle tends to get eclipsed by the longer-term cycles like the 40-year
and 60-year cycles (both of which have a major impact on equity prices
and the economy). But the 24-year cycle takes on a special significance
all on its own: it’s the cycle of war.

The final “hard down” phase of any cycle is defined as the final
8% to 12% of the cycle (averaging 10%). Therefore the final “hard
down” phase of the previous 24-year cycle encompassed most of the year
1990. Not surprisingly, the year was a bearish one for stocks. The
banking sector was particularly hard hit by this particular 24-year
cycle as 1990 was the worst part of the infamous S&L crisis and saw the
failure of more than 100 small banks.

The 24-year cycle might be described as the first of the major
longer-term cycles and tends to bottom with a strong impact. Not only
does this cycle typically bring about a major decline in equity prices,
its bottom also historically coincides with the initiation of military
hostilities.

Over the past few years, the fortunes of Europe’s euro currency have appeared to significantly influence the US stock markets.  This rather-curious relationship has proved vexing at times to American traders, as it doesn’t seem logical on the surface.  But given the high correlation between the US stock markets and the euro, prudent traders can’t ignore its impact.  And the euro’s state today is very bullish for US stocks.

 

Ever since this odd composite currency was born in January 1999, the euro has been much maligned.  More or less continually over this entire 13-year span, skeptics and naysayers have been calling for the euro’s imminent demise.  They argue that a currency straddling such a disparate and economically-diverse group of sovereign nations is doomed to fail.  But the euro’s stunning record begs to differ.

In the brief span in currency terms since its introduction, the euro has achieved vast success beyond what the wildest optimists in the late 1990s could have dreamed.  Something like 330m Europeans use this currency daily, along with 175m more people worldwide using currencies pegged to the euro.  In November 2011, the total euro banknotes and coins in circulation surpassed the US dollar’s!  Today the euro is by far the world’s second-largest reserve currency and second-most-traded currency after the US dollar.

 

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Feb 14, 2012

1. Saudi Arabia’s top power brokers recently claimed they would not
allow oil to trade over $100. Click here now [5] to view the oil price
trading above $100 this morning.

2. The power brokers have already failed. How big their failure will
become remains to be seen, but things don’t look good for the oil
bears.

3. When any major market might be about to embark on a strong rally or
decline there are both bullish and bearish factors in play. The
market’s direction is ultimately determined by _liquidity flows._

Super Force Signals

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We Take Every Trade Ourselves!

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Weekly Market Update Excerpt

Feb. 10, 2012

Morris Hubbartt

 

UUP (US Dollar Proxy) Chart

 

• Human behavior is predictable, because humans are a herd, although we are reluctant to admit it.  Ever since the 2008 Lehman moment, the US Treasury bond and the US dollar have been perceived to be above reproach.  Traders from around the world herd into these two markets each time other markets get into trouble.  

 

To say that complacency has reigned in the last few months is an
understatement. Volatility as measured by the CBOE Volatility Index
(VIX) has fallen 60% since October and 20% since the start of 2012.

To put into context just how much volatility has fallen since the
latest rally kicked off in October, the 10-year chart of the S&P 100
Volatility Index (VXO) is shown below. The VXO is an excellent frame of
reference for the absence of widespread fear in this market in recent
months. As you can see, volatility is approaching historically low
levels not seen since before the credit crisis began.

BETTER DAYS AHEAD?

BIG PICTURE – Over the past month, US economic data has surpassed analysts’ expectations and this positive surprise has triggered a rally on Wall Street.

You may recall that only a few months ago, the investment community was worried about Europe and many were questioning the survival of the single currency. During that period, investors were dumping all sorts of risky assets and capital was flowing towards the world’s reserve currency and the most liquid government bond market. Back then, European leaders were desperately trying to find a solution to the debt crisis and policymakers were engaged in what seemed to be never ending talks!

Then, a few weeks ago, the European Central Bank extended massive loans to troubled European banks and that seemed to calm the market. Based on this development, risky assets found some support and the downtrend was neutralised. Although the European Central Bank’s secret bail-out is not a real solution to the European crisis, at least it has managed to temporarily remove the risk of a serious banking crisis. Perhaps this is why investors have decided to bid up the prices of stocks, high yield bonds and commodities.

More recently, the Federal Reserve announced that it will keep interest-rates at near zero for at least another 3 years! This surprise news also excited the market and once again, risky assets were bid up by investors. Unsurprisingly, the world’s reserve currency weakened on this policy action and it appears as though the world’s fever chart has topped out for now. Figure 1 shows that the US Dollar Index peaked a couple of weeks ago and it has now broken below its support level (blue line on the chart).

In the Bullring With Gold

By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors

 

After prices fell 10 percent in December, many investors wondered if the bull market in gold was running out of steam. That was before Federal Reserve Chairman Ben Bernanke swooped in with a “red cape” and fired the bulls back up. Since the Fed reassured the world that interest rates will remain at “exceptionally low levels” for another two years, gold has jumped more than three percent.

UBS described the situation simply, “if investors needed a (further) reason why they should be long gold now, they got it yesterday … a more accommodative policy is a very good foundation for gold to build on the next move higher.”

To gold bugs, two more years of near-zero, short-term interest rates means negative real interest rates are here to stay, and this has historically been a strong driver for higher gold prices.

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Feb 7, 2012

1. While I may have a few minor concerns about the current emotional
state of some gold market investors, I have absolutely no concerns about
what I see on the gold chart. It’s a bullish work of art.

2. Still, if you want to drive from Los Angeles to New York, I think we
can all agree that you should consider stopping for gas, correct?

3. Well, the gold price needs to stop for financial gas on its trip
across “dollar country”, particularly when it has “driven” $240
uphill on the dollar price grid, and is preparing to blast above
_significant technical resistance.  _

4. Click here now [5] to view the key daily gold chart.  It’s a
picture of bullish beauty, and I have highlighted the enormous wedge
formation with two black trend lines.

Jan 31, 2012

1. If a tree falls in the forest, does it really make a sound if nobody
hears it fall? Click here now [5] to view a falling OTC derivatives tree
being marked to “_it never made a sound_” model.

2.  In the simplest terms, credit default swaps (CDS) are a financial
insurance product used heavily by hedgers and speculators in the
government debt arena.

3. A lot of investors thought that a huge deflation would occur when
the OTC derivatives written on real estate blew up, but what they
didn’t anticipate was that rule changes would be made by the Financial
Accounting Services Board (FASB).