LR European

Precious Metals: Breakout, Fakeout or Shakeout?

A beautifully argued article. Thank you. However, I think you are wrong on a number of counts.

1)You suggest that gold has not performed in a year of financial crisis. There are few assets close to their all time highs apart from gold, so....

2)You suggest that everyone who could possibly want to be in the trade has been brought in to gold. Actually the allocation to gold among the big funds (pensions, general mutuals etc.) remains close to zero and the same applies to the major wealth managers. Gold remains a minority interest among private investors, albeit with a widening circle, but we have not begun to travel the slope of broad acceptance.

3)You suggest that a shake out is needed before gold can take off. Possibly, but I think you overstate this. Gold's consolidation over the past year has been one of the lengthiest in the current bull market and sellers have been thinned out already. We may well see what lies behind door #3, but I suspect it will be a small room that no one wants to remain in for long...

S&P 500 Cycle Is Clear - Rally Approaching End

Privately, I pencil in potential targets for The Bear that make the hairs on the back of my neck stand up with fear.

However, I have few things to say, if any, that are not widely known, discussed and understood by many.

Right now, I am conscious of how very few people believe this rally will be anything more than another spasm in the bear: how many people are convinced that Now is the Time to start at least a correction, if not a full resumption of the bear trend.

Well, some things are not quite lining up here. If the problems are known and the majority expects prices to fall, then who is the seller going to be? And if we can't quite find him/her in time, how can we be sure one of those people on the sidelines with all that cash wont start to buy? I can see a few buyers, but very few sellers which might mean we have another major squeeze higher.

It doesn't mean I don't think we will see those scary numbers on the downside. Just not soon.