Party goers are gathered around the punch bowl as expected after the FOMC’s token move on QE. Jeff Lacker is jawboning additional tapers in $10b chunks and all seems right, except… the ‘continuum’ (AKA the 100 month EMA on the 30 year bond yield chart).
Let me ask you Beuller, what happened at the red arrow in 2000? What happened after the red arrow in 2007? What happened after the plunge in 2008? What happened after the red arrow in 2011? What happened after the most recent bottom in 2012? The answers are 1) the end of a secular bull market in stocks, 2) the end of the last cyclical bull market in stocks, 3) the birth of the current cyclical bull market in stocks, 4) the end of the big cyclical commodities rally and 5) the launch of this most powerful leg of the cyclical stock bull market.
So what is going to happen if the black arrow turns red? For that matter, what is going to happen if it flips itself upside down and turns green for the first time in its decades-long continuum?
I am stocked up with positions for continuing momentum in the very short term. Other than actual gold held like, forever, I am not yet participating as a bull in the precious metals. Yet the dumbest money is now being coerced into ‘RISK ON’ by the likes of this headline and some self-promoting trend follower on CNBC announcing “I wouldn’t buy gold in 2014 with my worst enemy’s money” and all the trend followers touting a new secular bull market 4.something years into an existing cyclical one.
Ha ha ha… get this, gold is now firmly, 100% RISK OFF and contrary to the speculative environment going on in stocks, where the dumbest money on the planet is being sucked in to hold the bag longer term. Another financial media and Wall Street greed operation, complete with stories that are backed by 2.5 solid years of existing trend.
I don’t put too many details on the public sight so please don’t interpret this post as meaning anything about gold’s technicals, which flat out stink. But that is just the point; the market’s technicals are in pure upside momentum mode and gold is opposite, and in the mirror. Or better yet, the looking glass.
Again, I am playing crack headed momentum oriented stock bull at the moment and other than my long term orientation, not an active precious metals bull… yet. But I am sure not buying the promotions flying around the punch bowl this holiday season.