Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19
Betting on Next British Prime Minister Tory Leadership Betfair Markets Forecast - 10th June 19
How Can Stock Market Go Up When We’re Headed Towards a Recession? - 10th June 19
If You Invest in Dividend Stocks, Do This to Double Your Returns - 10th June 19
Reasons for the Success of the Dating Market - 10th June 19
Gold Price Trend Analysis - Video - 10th June 19
US Stock Markets Rally Hard – Could Another Big Upside Leg Begin? - 10th June 19
Stock Market Huge Cosmic Cluster Ahead: Buckle Up! - 10th June 19
Stock Market Higher To Go? - 10th June 19
The Gold Price Golden Neckline… - 10th June 19
Gold Price Seasonal Trend Analysis - 9th June 19
The Fed Stops Pretending - 9th June 19
Fed Rate Cuts Soon; Bitcoin Enthusiasts Join Wall Street in Bashing Gold - 9th June 19
1990s vs. 2010s - Which Expansion Will be Better for Gold? - 9th June 19
Gold Price Trend Analysis, MACD, Trend Channels, Support / Resistance - 8th June 19
Gold Surges Near Breakout - 8th June 19
Could Gold Rally Above $3750 Before December 2019? - 8th June 19
5 Big Lies About Precious Metals Investing Exposed - 8th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Global Depression as Economies Face Bankruptcy

Stock-Markets / Financial Markets 2009 Mar 02, 2009 - 12:34 PM GMT

By: Captain_Hook

Stock-Markets Best Financial Markets Analysis ArticleA Brave New World - Or should I say, one will need be increasingly brave to live in a rapidly changing environment, strewn with perils and pitfalls not contemplated by the masses (mob) just yet. Slowly but surely process is taking hold in this regard however, and it will accelerate and spread like wildfire as the economy continues to contract, and conditions are officially deemed to be in Depression on a global scale. The consumer is pulling back , economies are turning in , and currencies are crumbling just as forecast on these pages many moons ago, where even Switzerland is already showing just how bad it is, which is surprising to many.

The following is an excerpt from commentary that originally appeared at Treasure Chests for the benefit of subscribers on Thursday, February 19 th , 2009.

What should not be surprising of course is now nationalization of the banks is all the talk States side, with Greenspan at the front of the pack in adding insult to injury for battered investors considering he is a chief architect in the meltdown. Britain has led in this regard with the stealth nationalization of its entire economy essentially, and now they are talking about acceleration with the Bank of England calling for quantitative easing . As Bob Hoye points out in his latest however, whether it be called ‘stimulus' or ‘socialism' by another name, this kind of thing never works in the end.

This is why gold is rising, because investors know this and they want out of an increasingly ‘shaky system'. What they are saying is they think once nationalized, that will be the end of the banks. And since they are the ones that borrow all the money into the system, this means a new form of money / currency system must necessary also be in the cards eventually, as well. So increasingly they hide in gold until more is know, not to mention it might also be needed to back new currency regimes in the future as confidence and trust levels both at home and abroad falter. (See Figure 1)

Figure 1

Given this is the time of year for gold to party anyway, this season it has a particularly good reason to rise, possibly good enough for it to take out significant four-digit resistance on a lasting basis. Why would it do that this year? Because both the economy and stock market are going to continue to meltdown, where the solvency of both companies and countries will increasingly come into question. So, as denoted above, although a breakout test might be in the cards off a double top near-term, it would likely be dangerous fading the recent Golden Cross (50-day moving average [MA] cutting above the 200-day MA) seriously.

Supporting this view is the now confirmed (2-day) break of the dollar ($) back into the sinusoidal that has been defining its advance, which is indicative of global deleveraging. The understanding here is the worse things get the greater the desire to reduce credit. So, with a great deal of $ denominated debt floating around the world, it only makes sense a sort of ‘synthetic squeeze' higher would ensue due to deleveraging when came time to pay the tab. This is of course why gold and the $ can rise in unison, because informed individuals seeing the extent of the deleveraging taking place know what the implications are, with ‘solvency' in both business and government becoming increasingly possible the more credit contracts. (See Figure 2)

Figure 2

In terms of a projected course for the $, from here I would not be surprised if it pulls back to test sine support before heading higher, likely breaking out into new high ground for the larger sequence. Correspondingly then, and as with the $, gold should also take out double top resistance soon as well, quite possibly advancing hundreds of $'s higher before a correction back down to test the breakout at $1,000 occurs. And as mentioned the other day, with gold bullion getting increasingly difficult to obtain these days, don't be surprised if precious metals stocks maintain a firm bid in spite of broad market weakness as investors are forced into paper. This is keeping the indexes well supported in spite of an increasingly questionable prognosis for the broads. (See Figure 3)

Figure 3

Still, like gold, technicals are getting over-extended for precious metal indexes, with 21-month exponential moving averages (EMA) fast approaching across the board. So again, don't be surprised if eventually weakness in the broads affects liquidity conditions here too. The fact volatility has been contracting while prices have been moving higher is a distinctive possible ‘red flag' that another impulsive move lower could be in the cards once the effect of positive seasonals passes. Moreover, this could be taken as a ‘deflation signal' if the broads were to fall at the same time. And it definitely looks like the broads are destined to fall far further if signals in the plot below prove accurate, however the sequencing might not be what most are expecting in terms of a typical post cash sequence , which again, is subject matter discussed the other day . (See Figure 4)

Figure 4

This though process actually solves a conflict I was having with the larger degree count on US stock indices, where in fact based on the Elliott sequence presented above, this move down will actually finish off the first Intermediate Degree wave lower of the larger Primary affair. This makes sense from the perspective speculators might start betting bearish with the seasonals this year, meaning spring and summer might hold some surprises. It should be pointed out ‘seasonal inversions' are not uncommon in mature markets, which of course the present unwinding mania definitely qualifies. We will keep you posted on our thoughts regarding this subject matter as part of regular sentiment reviews.

Past such considerations however, make no mistake about it, any such bounce as discussed above might be from considerably lower levels, which is thinking that is confirmed with the pronounced ‘crash signature' in the daily S&P 500 (SPX) plot seen above. I mean look at the divergence there, with the Accumulation / Distribution Indicator (A/D) still in the proximity of ALL TIME HIGHS, set against a deteriorating On Balance Volume (OBV) profile. In my mind it doesn't get any more bearish than that, with such a profile indicative of still blatant complacency set against the reality of the most dire economic conditions to ever hit modern times.

Unfortunately we cannot carry on past this point, as the remainder of this analysis is reserved for our subscribers. Of course if the above is the kind of analysis you are looking for this is easily remedied by visiting our continually improved web site to discover more about how our service can help you in not only this regard, but also in achieving your financial goals. For your information, our newly reconstructed site includes such improvements as automated subscriptions, improvements to trend identifying / professionally annotated charts, to the more detailed quote pages exclusively designed for independent investors who like to stay on top of things. Here, in addition to improving our advisory service, our aim is to also provide a resource center, one where you have access to well presented 'key' information concerning the markets we cover.

And if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these matters.

Good investing all.

By Captain Hook

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2009 Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Captain Hook Archive

© 2005-2019 - 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

6 Critical Money Making Rules