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John Wilson
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Long term buyer and holder of silver. I still have silver from when it used to be the actual US money- when it had intrinsic value. I plan to hold it and hopefully accumulate more. Began investing and charting on paper in the late 1980's (hey, a computer cost $5000 then). On Gold: it's not that... More
  • Bright Spots In The Week As The DOW Drops 318 On Friday 12 comments
    Jan 24, 2014 10:52 PM | about stocks: TLT, GLD, GDX, AGNC, IVR, MORL, SAND, HL

    [see my jan 28 update at the bottom of this blog referenced in my 1/28 stock talk]

    I didn't hear anything about today's steep market drop of Dow -318 points and S&P -38 until I got home from work. I looked things over and sort of analyzed what seemed to be significant to me. I happened to notice a couple sectors that did not go down.

    The month of December was a turning point for two areas of investment interest with a double top for one and a double bottom for the other.

    1. Interest rates completed a double top on Dec 31 and now appear to be trending lower;BOE Interest Rate 10-Year T-No (^TNX)
    2. Gold completed a double bottom Dec 19 and now appears to be trending higher. Looks like the interest rate correction is over; at least it looks like it should be obvious now. SPDR Gold Shares (NYSEARCA:GLD)

    It looks like the interest rate correction is over, or in other words, it looks like rates have topped out for now.

    I had considered buying (NYSEARCA:TLT) when it hit $102 at the end of December, but did not act on it. It has now run from $102 to almost $108 having gained almost 6% in a little over three weeks from Dec 31 to Jan 24.

    With the article below announcing the obvious recent strong performance if Treasurys, you can look for profit taking in TLT to commence soon.

    Article: Treasurys surge as investors shed risk

    NEW YORK (MarketWatch) - Treasury prices surged Friday, closing out their second consecutive day of gains as investor fears over global economic growth triggered a rotation out of riskier assets like emerging markets and into haven securities like U.S. government debt.

    Treasurys surge as investors shed risk Ben Eisen. Jan. 24, 2014

    Any correction for TLT would probably only go down to $104 to $105. Probably will not see $102 again but $104 would be a good point to take a position.

    Rotation into Gold and PM miners is becoming apparent.

    With the overall market down a stiff 2% today (1/24/13) gold was steady in what appears to be an ascending triangle (look at hourly chart). Mining stocks were only down fractionally.

    Gold is firmly above its 50 day MA now.

    Daily Gold chart courtesy of StockCharts

    (click to enlarge)StockCharts gold

    China and Asia Down. Gold holding as a store of value.

    Article: Asian shares fall on weak China data, stronger yen. Asian shares soften on gloomy China manufacturing data, stronger yen

    finance.yahoo.com/news/asian-shares-fall...;_ylt=A2KLOzG_FuNSSxoAuJiTmYlQ

    It is somewhat of a disconnect to see China and emerging markets fall today while gold held up.

    If the thesis is that China and Asian buyers are supporting gold, it appears to be vindicated today with the Asian stocks falling while gold held up with no loss. The Asian investors DID NOT sell their gold.

    (GLD) was up $0.50 today.

    (NYSEARCA:GDX) Down only five cents today. (NYSEMKT:SAND) was actually up 0.11 today or 2%.

    GDX daily chart, one year with averages.

    The market action of gold is following the course that I discussed in my December 19 article which came out the same day that gold made its recent double bottom. "Gold Completing Bottom as Cyprus Decides not to Sell."

    seekingalpha.com/article/1907421-gold-co...-sell

    Another Sector that held up today:

    REITS and mREITS

    Notice December 30th was the turning point for interest rate sensitive investments. These REITs hardly noticed the Friday 1/24 318 Dow dive:

    (NASDAQ:AGNC) down .03 but is up 10% since Dec 30. Yield is 12.8%

    (NYSE:NLY) unchanged, up 8% since Dec 30. Yield is 11.8%

    (NYSE:IVR) down .07, up 8% since Dec 30. Yield is 13%

    (NYSEARCA:MORL) 2x leveraged down .22 or 1%, but up 18% since Dec. 3. Yield is 24%. Yes, that's a 24% ttm yield. Would double your return in less than 3 years.

    Turning point for Gold and interest rates - new short term trend.

    Gold [up] and interest rates [down] turned, between Dec 3 and Dec 30.

    I take this to be a new trend in which we will see gold continuing to rise maybe another $100 and interest rates continuing to ease or at least to not continue going up.

    For this reason, the REITs listed above should continue to do well.

    That's all for the moment. I have to get some coffee and read some comments.

    This is the content of two emails I sent to my brother discussing my take for the near term probability of gold's next move:

    Jan 28, 2013

    My take on GLD, HL, GDX, AXU

    Gold is getting ready to break out of bottom range. I look for gold (GLD) to correct sideways or horizontally without going down too much, staying mostly around 120. Then the mining stocks will have paused and given back a little. I think I will buy some GDX and SAND especially if they settle a little more. The Slow Stochastic for GLD is turning down a little; give it a little time - there may be a few days of slight decline - then the move. The basic technicals are all positive.

    I like using the 20, 50, 200 averages together on a Yahoo chart for GLD. RS and MACD are positive.

    I don't know why Avi can't see it.

    John

    When you look at HL and AXU again, keep in mind that they will have their rather sharp movements, but look at a chart of GLD and notice how it is much less volatile. They are fluctuating up and down more as GLD makes smaller movements. HL and AXU will have their up and downs as GLD corrects sideways/horizontally in a more gradual manner. This is one reason I think there has been a bottom, because gold's downward momentum is virtually gone. It is stealthily creeping up. GLD will find support at the 50 day MA and bounce from there at 119 to 120, and then from there, the bigger move will take place.

    I am thinking there will be a few days of sideways to slightly down. I would be looking hard at things [to consider buying] if GLD gets to $119. Draw a Yahoo chart with 20, 50, and 200 averages. I like the cross-over of the 20 over the 50.

    Direct Link back to

    Interesting Times for All Commodities blog:

    seekingalpha.com/instablog/5038891-inter...?source=kizur_seekingalpha

    Disclosure: I am long GDX, AGNC, IVR, MORL.

    Themes: Gold Precious Metals, REITs Stocks: TLT, GLD, GDX, AGNC, IVR, MORL, SAND, HL
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Comments (12)
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  • Interesting Times
    , contributor
    Comments (10139) | Send Message
     
    JW

     

    Very interesting take on what you perceive.. Clearly we are in volatile times right now.. May go back and forth but trending lower,,

     

    Deflation is concerning me !!
    31 Jan, 12:56 PM Reply Like
  • John Wilson
    , contributor
    Comments (1093) | Send Message
     
    Author’s reply » IT
    So far my interpretation of the market bottoming process is accurate since Dec 19 and also this week as I said above in the "email" section:
    "I look for gold (GLD) to correct sideways or horizontally without going down too much, staying mostly around $120.
    Yesterday GLD was below 120 and today it is slightly over it. Mining stocks have not given back much though. GLD's 50 day MA is 119.21. I believe price action will tighten around this price and when it fails to go down, we will have the technical breakout, which actually is in the first stage.

     

    You are right about deflation but it will not be perceived for a while yet or not serious enough yet.

     

    Maybe the JPM directors who are selling stock have more knowledge about what is to come; like the brokerage offices that laid off employees six months before the stock market sell-offs.
    31 Jan, 10:47 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10139) | Send Message
     
    JW

     

    Funny, as no one really believed that happened...Trust me, i lived through it.. I did fine back then too !!

     

    I still think we have a correction coming in stocks and people are going to get caught with their pants down...
    1 Feb, 12:27 AM Reply Like
  • alan shapiro
    , contributor
    Comments (200) | Send Message
     
    I too believe we have a correction coming in stocks, regardless of the Yellen remarks. My question to YOU John, is this: the miners have done remarkably well , and if GOLD continues in a stable manner despite the market, could the miners continue higher, or go sideways during a scenario such as this? Considering how far(and how long) they overshot to the downside , this seems very possible. To IT, they WILL get caught with their pants down, and it won't be a pretty sight....
    13 Feb, 07:44 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10139) | Send Message
     
    ALAN

     

    Feel free to join us on my blog. John is a constant upgrade with his comments. I am sure he would recommend us..

     

    http://seekingalpha.co...

     

    Open to all. Including the portfolio challenge that JW is gaining on.. ANYONE can play along ..
    13 Feb, 09:05 PM Reply Like
  • John Wilson
    , contributor
    Comments (1093) | Send Message
     
    Author’s reply » Alan:<p class="double"> <... the market correction we saw in January - written about above- which was more like sharp pull-back, the miners and gold were not affected too much because they had already come through their own sharp correction and taken months to test their lows and held. The correction that you may be asking about hasn't happened yet in my estimation. I am wondering if it will occur later this year. It could be like what "Contrarianadvisor" has been commenting about.
    -----
    I have a a couple of comments on what I fear may be coming. I am just beginning to focus on this possibility. My comments ask if there is a cyle that goes back to the depression that is going to see a major top possibly this year. don't like to type all my ideas all over again so follow this comment link back to it. {the comment to Ninja}<p class="double"> <...http://bit.ly/1flq0KD<;;;p class="double"> <... class="double"> </p>In a real "caught with pants down" "big kahuna" event, gold will go down. Everyting will go down.
    13 Feb, 11:38 PM Reply Like
  • John Wilson
    , contributor
    Comments (1093) | Send Message
     
    Author’s reply » Seeking Alpha is really screwed up. It is almost impossible to write a simple comment without their automatic screw-up formatting destroying what you have written like it did to the comment I just wrote.
    13 Feb, 11:49 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10139) | Send Message
     
    JW

     

    Watch the blood pressure. You might have to sign up for OCARE !! lol
    14 Feb, 12:24 AM Reply Like
  • alan shapiro
    , contributor
    Comments (200) | Send Message
     
    I agree with you John .This recent move was just a blip, and I think you were referring to Contrarian mentioning 70% on which I supported him when they attacked him. but then I too got insulted ,but so be it. Contrarians will prove correct it's just a matter of waiting...I 've been waiting and saying the same thing for years.
    14 Feb, 09:40 AM Reply Like
  • alan shapiro
    , contributor
    Comments (200) | Send Message
     
    Well John , I've just spent some time today , reading YOU. Last year I spent a great deal of time posting, and messaging with my friend Emmet Kodesh , so I was absorbed to the point that I was virtually unaware of your work. After losing Emmet, I've been left with a terrible void (we shared the same philosophy on PMs and this moribund culture), which is how I stumbled onto you. Terrible way to meet, but after reading your articles on" healthcare", and the execution that was all but forgotten ( I could barely recall that one) (good job MSM), you've really done a number with me. Great stuff , back later. Thanks
    14 Feb, 06:26 PM Reply Like
  • John Wilson
    , contributor
    Comments (1093) | Send Message
     
    Author’s reply » Alan
    I wasn't aware about Emmet. Very sorry about his passing. I was totally surprised like I am sure all of his readers were. He was one of he sharpest minds on SA and one that I would go to for his unique non-mainstream perspective. I feel both unworthy to be mentioned in the same sentence with him and at the same time honored. I write from a similar perspective; I was drawn to his writing because he was seeing the same "top down" corruption that I sometimes write about.

     

    Thanks for your appreciation.
    14 Feb, 07:18 PM Reply Like
  • alan shapiro
    , contributor
    Comments (200) | Send Message
     
    Sorry John, I mentioned it to someone else a few weeks ago and he too, was shocked. I feel TERRIBLE to have been the one to tell you. Never thought... Emmet was a truly great soul who understood the "top down corruption" and more about this moribund culture that we live in. I considered for a short period, writing pieces to fill the void that he left, but I don't think I (or anyone else) could do it. Dr. Narrett had an unmatched way with words. They just seemed to flow from him, and he wrote pieces in a short time that would have taken me hours to complete. The work and research that he did on PMs is unmatched. I think he was a truly special human (we shared a lot of thoughts with PERSONAL MESSAGES) and I do think that you're quite worthy to be mentioned in the same sentence as he , and I think he would agree! You've made many great points as well Thanks ALAN
    14 Feb, 07:51 PM Reply Like
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