We are seeing a distinct change in 2 of the world’s biggest stock markets that may indicate the easy money game is no longer working. Yesterday right toward the end of trade, the Shanghai Composite plunged nearly 8.5% in its biggest one day drop since the start of the GFC and second biggest in history. In the US we are seeing the S&P500 break key resistance lines not broken since the post GFC rally began and looking like the formation of a down trend. Note each time prior when there was a downturn it was reversed by the US Fed starting a new round of QE. Funny that now it is happening again they are talking about RAISING rates… the opposite of previous stimulatory responses. What could possibly go wrong? Our Aussie All Ords seems to be on a similar path… So there appears to be a choice between buying something at or just past its top, or buying something (say, gold and silver) that looks at or near its bottom…
Since the Chinese government itself is buying and selling stocks, and has prohibited a considerable number of Chinese stocks from trading at all, the numbers are meaningless, and there's no sensible conclusion that can be drawn from current trading activity, whether stats or trends. The premiums for precious metals have more than doubled in the past six weeks; this is easily verified by looking at Apmex, MCM, and Provident. In April, you could buy for $1.50 (per ounce) over the (paper) spot price. Now it's more like $3.50 to $4.50 depending on quantity, and many types of item are "out of stock." I am speaking primarily of 90%, not Mint products, not Eagles, not rounds. Something is getting ready to happen. If I knew what, I'd be a millionaire by Labor Day. Best guess among commentators - preparations to bring the yuan into the "basket" of global reserve currencies, in late September. Personally, I do not think this will occur.
I do agree with you here Doug, I don't think it will occur that quickly either, but more important, even if it did happen in that time frame, so what? It would not be a game changer. The Yuan would be the least significant of the 5 Reserve currencies for quite some time and everyone would still want Greenbacks. I'm mean would would really be exchanging $USD for Yuan, I know I wouldn't. The Dollar is still King.
Well, from today's action, it appears like your analysis was wrong AGAIN. Instead of breaking through support and starting a downtrend, it appears like it is just bouncing off support like it has all year long. In light of this new info, are you changing you recommendation of selling stocks and buy PM's ??????? I didn't think so.... You know it is very clear your posts are nothing more than a thinly veiled attempt at self promotion to sell Bullion. What is even more disturbing, you are touching on scare tactics. "Hurry up, buy bullion before the Stock Market Crashes" Now I admit, these scare tactics are effective as that is what helped propel Silver to near $50, but it really takes someone whose moral compass is not exacty pointing true to utilize them. JMO Mike
Mike, take a look at a 2 year trend line for the Dow specifically the moving average con/div (MACD) - the volume is also decreasing - but not much - at least yet. It paints a different picture. The market swings are getting smaller, and the frequency of the swings is getting shorter. Do I understand all of it? No... But if I look at history they are indicators of a market pullback. And you can clearly see the pattern in any year by looking at the April - Sept volatility. "Sell in May - Go Away" happened in June this year. You will also notice that the trend line in the MACD is below "par" right now, where as last year it was above the par line. FWIW, I don't doubt that the bullion guy is selling fear - he stands to gain from it. Nothing wrong with hedging your bets a bit though.
Brett, as far as a pullback, you could very well be right, but as I have said before, you need to be right twice. Getting out at the right time is a lot easier than getting back in at the right time. I know you are a student of the market and you have made some good moves, so I wish nothing but the best. I just feel it is a little more tricky than you realize, but time will tell. Maybe you are in that very small percentage the can time the market successfully , but that is one exclusive club. As far as the Bullion guy selling fear, that is exactly what he is doing. It's the same old recipe, buy Bullion now or you will lose your money, and I have a big problem with that. Mike
Agreed on all counts, and sometimes it's just a mixture of bravery and dumb luck - which I've had my share of too. Heck, today I found a penny in the parking lot! I enjoy discussions to view the various talking points and hopefully everyone involved benefits. But I don't think there is one right answer. What is right for a retiree is certainly not the same as it would be for someone just out of school with student loan debt. Now I do have to tell you that I have another buyer for this car, and he's offered more. The thing is, I like you - so I'd rather sell it to you for less money since you're a terrific person. If we can't cut a deal today, I may have to sell it to the other buyer, and I'd just kick myself if you missed out on this terrific deal! (grin, duck, run!)
I agree with you on one size does not fit all. As a younger investor you do have the luxury of being a bit more aggressive. There is just so much more time to make up any missteps. Good luck, And the check is in the mail for the car. EVERYONE on the Internet is just so honorable, I know you wouldn't steer me wrong. Oh wait, I just remembered I DIDN'T fall of the turnip truck yesterday. Now I need to go find that number for the bank to cancel payment on the check Geesh...
