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should you buy gold ?
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| Should you buy gold |
should you buy gold ?
Should you buy gold - One of Wall Street's most respected forecasters says the market's rally is in trouble, and that investors are likely to do better by betting on gold. That is why we had to cover the daily chart above that goes all the way back to 2013. After years of bearishness, is gold starting to come out of the wood, and beat on its hairy chest..screaming "I AM BACK!"
The Dow Jones industrial average and S&P 500 Index have staged dramatic comebacks from their lows, erasing or nearly erasing their losses for the year. In fact, the Dow's rebound may prove to be its best intraquarter rebound since 1933. That is quite impressive, for sure, but its seems that the bounce does not lack liquidity, meaning its basically novice traders caught short, and forced to cover their trade.
We would not be surprised if that the strong run may in fact be in jeopardy. It has many investors on edge, and smart money is staying away now we are back at the highs. But what is being talked about now, with a huge breakout move is gold. And the move could just be getting started. [See chart above]
That is, the popular trade of being long momentum stocks against a short position on the S&P 500 is being unwound. You can see it on the charts, but gold is another one that is taking our fancy at the moment. Since the market bounce has been largely driven by re positioning, he sees little reason for it to continue in a meaningful way. You can literally see that the VOLUME that has been driving stocks the last few months, has not been strong at all. In fact its safe to say, its quite alarmed to see the price turn up so violently and not be backed up by FRESH money or LARGE volume at the same time. That is a bit of a warning sign our analysts think.
While the market has been basically trading inside a violent sideways range, what has been talked hot on the lips of astute investors is GOLD! investors should stick with the defensive gold trade right now, even after the recent surge in prices. The Federal Reserve's more dovish policy outlook "should put some downward pressure on the dollar and hence should be supportive of gold." Well that makes more sense to us at the moment. Plus the fact that YELLEN keeps talking about inflation starting to creep in. In the past GOLD has always performed very well in an inflationary environment. In addition, the rising chance of Donald Trump's becoming the next president could also be bearish for the dollar, given the restrictive trade measures he has proposed, such as large tariffs against Chinese goods. "Generally, the U.S. dollar could be under some pressure if you have these types of policies,"
So trump, will probably get the nomination, but our studies suggest that HILLARY CLINTON will become the next president of the United State, and the first ever female as well. Hopefully she gives Mr Trump the tongue lashing, he has been dishing out to everyone else. But back to the markets, if Trump was to win, that would be sour for the economy and stockmarket, and good for gold.
Hillary would be a much more soothing tone for the markets, but the election results are many moons away right now.
But fundamentals do not mean so much right now, you can see clearly on the charts, we are in the midst of a huge BREAKOUT to the upside, with supported volume. It seems the longer term investors are coming back in droves here. So it goes without saying, this could be a trigger for much more buying pressure and breakouts to the upside in the longer term also. Time will tell.
Should you buy gold - One of Wall Street's most respected forecasters says the market's rally is in trouble, and that investors are likely to do better by betting on gold. That is why we had to cover the daily chart above that goes all the way back to 2013. After years of bearishness, is gold starting to come out of the wood, and beat on its hairy chest..screaming "I AM BACK!"
The Dow Jones industrial average and S&P 500 Index have staged dramatic comebacks from their lows, erasing or nearly erasing their losses for the year. In fact, the Dow's rebound may prove to be its best intraquarter rebound since 1933. That is quite impressive, for sure, but its seems that the bounce does not lack liquidity, meaning its basically novice traders caught short, and forced to cover their trade.
We would not be surprised if that the strong run may in fact be in jeopardy. It has many investors on edge, and smart money is staying away now we are back at the highs. But what is being talked about now, with a huge breakout move is gold. And the move could just be getting started. [See chart above]
That is, the popular trade of being long momentum stocks against a short position on the S&P 500 is being unwound. You can see it on the charts, but gold is another one that is taking our fancy at the moment. Since the market bounce has been largely driven by re positioning, he sees little reason for it to continue in a meaningful way. You can literally see that the VOLUME that has been driving stocks the last few months, has not been strong at all. In fact its safe to say, its quite alarmed to see the price turn up so violently and not be backed up by FRESH money or LARGE volume at the same time. That is a bit of a warning sign our analysts think.
While the market has been basically trading inside a violent sideways range, what has been talked hot on the lips of astute investors is GOLD! investors should stick with the defensive gold trade right now, even after the recent surge in prices. The Federal Reserve's more dovish policy outlook "should put some downward pressure on the dollar and hence should be supportive of gold." Well that makes more sense to us at the moment. Plus the fact that YELLEN keeps talking about inflation starting to creep in. In the past GOLD has always performed very well in an inflationary environment. In addition, the rising chance of Donald Trump's becoming the next president could also be bearish for the dollar, given the restrictive trade measures he has proposed, such as large tariffs against Chinese goods. "Generally, the U.S. dollar could be under some pressure if you have these types of policies,"
So trump, will probably get the nomination, but our studies suggest that HILLARY CLINTON will become the next president of the United State, and the first ever female as well. Hopefully she gives Mr Trump the tongue lashing, he has been dishing out to everyone else. But back to the markets, if Trump was to win, that would be sour for the economy and stockmarket, and good for gold.
Hillary would be a much more soothing tone for the markets, but the election results are many moons away right now.
But fundamentals do not mean so much right now, you can see clearly on the charts, we are in the midst of a huge BREAKOUT to the upside, with supported volume. It seems the longer term investors are coming back in droves here. So it goes without saying, this could be a trigger for much more buying pressure and breakouts to the upside in the longer term also. Time will tell.
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