Best of the Week
Most Popular
1.Spain Ignores Scotland Lesson as Catalan Independence Referendum Could Spark Civil War - Nadeem_Walayat
2.Used Car Buying From UK Dealer Top Tips, CarMotion.co.uk Real Customer Experience - N_Walayat
3.Spanish New Civil War Begins as Madrid Regime Storm Troopers Quell Catalan Independence Rebellion - Nadeem_Walayat
4.Virgin Media Broadband Down, Catastrophic UK Wide Failure! - Nadeem_Walayat
5.Are the US Markets setting up for an Early October Surprise? - Chris_Vermeulen
6.The Pension Storm Is Coming To Europe—It May Be The End Of Europe As We Know It -John_Mauldin
7.Stock Market Crash 2018; Will it Prove to be Another Buying Opportunity - Sol_Palha
8.The Profoundly Personal Impact Of The National Debt On Our Retirements - Dan_Amerman
9.Stock Market as Good as it Gets; Like 2000 With a Twist -Gary_Tanashian
10.1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - Nadeem_Walayat
Last 7 days
Bitcoin Hits $6,000, $100 Billion Market Cap As Helicopter Ben and Jamie Demon Warn The End Is Near! - 22nd Oct 17
Time for Caution in Gold Miners - 22nd Oct 17
“Great Rotation” Ahead; Will it Be Inflationary or Deflationary? - 21st Oct 17
The Trigger for Volatility, Rates and the Next Crisis - 21st Oct 17
Perks to Consider an Agent for Auto Insurance - 21st Oct 17
Emerging Megatrends Hurting Consumers - 21st Oct 17
A Catalyst of the Stock Market Bubble Bust - 21st Oct 17
Silver Stocks Comatose - 21st Oct 17
Stock Investors Ignore What May Be The Biggest Policy Error In History - 20th Oct 17
Gold Up 74% Since Last Stock Market Peak 10 Years Ago - 20th Oct 17
Labour Sheffield City Council Employs Army of Spy's to Track Down Tree Campaigners / Felling's Watchers - 20th Oct 17
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Bonds, Dollar, Stocks, Gold, Silver Major Markets at Turning Points

Stock-Markets / Financial Markets 2017 Jan 19, 2017 - 04:21 PM GMT

By: DeviantInvestor

Stock-Markets

Bonds have risen in a 35 year bull market. That bull market looks tired and probably peaked in July of 2016.

The U.S. Dollar Index recently hit 14 year highs. Has the dollar finally peaked? Has it turned downward since January 3, 2017?

Stocks have been rising since the 2009 crash lows. Rounded to the nearest point, the Dow hit 20,000. Was that enough to make a final top before a major turn downward?


Gold made an important low over a year ago but we continually hear chatter about gold falling below $1,000, perhaps to $700 or even $350. I believe it has turned upward and the chatter will dissipate.

Let’s speculate about turning points in these important markets.

T-Bonds:

The global bond market is perhaps $100 trillion. Derivatives tied to interest rates are perhaps another $500 trillion. Yes, these are big numbers and interest rates affect practically everything – student loan debt, consumer spending, sovereign nation borrowing, housing sales, mortgage rates, credit card rates, bank profitability, availability of credit and more.

The global bond market is the largest financial bubble in history. A crash would be important …

Examine this chart of the U.S. T-bond.

The vertical red lines are spaced 91 months apart – about 7.6 years. The high was last July.

Previous important highs shown at the ovals were close to those 7.6 year cycle peaks.

Since July T-bonds are 25 points off their highs and the 30 year interest rate is nearly a point higher than its multi-decade low. After 35 years this bull market probably has died. A global blood bath in bonds will create a financial version of the holocaust. (A short term bounce looks likely as of January 17, 2017.)

Read Alasdair Macleod: Malice in Wonderland

U.S. Dollar Index

Dollar exchange rates affect everything. Examine this chart.

The red lines are spaced 92 months apart, about 7.7 years. Highs shown at ovals occurred close to those vertical red lines, and a cycle high has potentially arrived now. Many people, including myself, thought the peak in March of 2015 was a sustainable high but obviously not. Perhaps the high occurred on January 3, 2017. As of January 17 the index has fallen over 3 points.

SP 500 Index

Stocks have been levitated by central banks, easy and inexpensive debt, massive credit, cheap share buybacks and more. Long-term cycles pointed to a potential top halfway through 2015, but central bank levitation won out. Stocks could turn here or delay a crash for several more months, perhaps as Charles Nenner suggests, until October 2017. Watch out if the S&P breaks the black support line rising through 2,000.

From Steve Saville:

“… based on an average of four valuation indicators the S&P 500’s valuation for today is the same as it was at the 1929 peak and second only to the 2000 peak.”

Timing and valuation agree – this market is too high and ready to run lower.

Gold

Gold prices bottomed in December 2015 unless you believe that deflation or a “black swan” event will crash all markets in the near future. The following chart makes a strong case for a gold bottom over a year ago. Ratios comparing gold to debt, the S&P, the DJIA and M2 also suggest that gold already hit a significant bottom. More importantly those ratios suggest that gold should rally substantially from here.

Thousands of metric tons of gold have been imported into Asia, from western vaults. Asians wisely prefer physical metal rather than paper and debt – a sensible perspective.

Silver:

Silver charts tell the same story as gold. Higher highs are ahead.

Quick Summary:

T-bonds, the dollar index and the S&P are debt based paper assets. They appear to be slightly past, at, or approaching very long term tops. Paper assets based on dodgy debt and excessive leverage look toppy and highly risky for 2017.

Question: What if all three major markets – bonds, the dollar and the S&P 500 – have topped, or will quite soon? What does that suggest could happen during the next four years?

Gold and silver are real assets but without the counter-party risk that devastated many individuals, hedge funds, and traders during the crisis of 2008. Another crisis could happen again, perhaps as soon as the week following Inauguration day.

Dodgy paper debts

or

physical metals that have retained their value for over 3,000 years? Hmmmmm! The choice should be easy.

All the best

Gary (for Rambus Chartology)

http://rambus1.com

FREE TRIAL - http://rambus1.com/?page_id=10

© 2016 Copyright Rambus- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rambus Chartology Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife