Zermatt, Jan-07
The Matterhorn from Chez Vrony balcony, Table 83 – Zermatt – 31 Years…
Ian McAvity’s
DELIBERATIONS On World Markets Technical analysis & other perspectives on the major world markets for stocks /bonds /currencies /precious metals
Ian McAvity Toronto, Canada
imcavity@yahoo.com SAMT Geneve / Zurich February 3 & 4, 2014
Confused?
Confused as a herd of goats on Astroturf ? ----US Economy, Debt & Stock Market Dollar & Fiat Currencies Gold, Miners & Silver
Kicking the can down the road
"What happens when can-kickers run out of road?"
Will 2014 be “the” year ? A Chartist's View of Secular Trends & Cycles Big picture perspective
Raise the ceiling – house of cards?
Iranian Deal? More “Arab Spring” Fiascos? Sunni / Shia challenges
Syria: Iran & Russia vs. Saudi & ?? Under the bus of “Appeasement”? Israel, Saudi, Kuwait, Qatar, UAE
New risks for Turkey? (US Track Record in Iraq, Egypt, Libya, Afghanistan, Pakistan ?)
The Presidential Vision thing… Syria September
“The Red Line in the sand…” The Washington Times on Sep 15th:
“Ex-KGB Officer talks Nobel Peace Prize Winner out of launching war.”
Washington hypocrisy in Domestic & Foreign Policy
Pearl Harbor
The Zimbabwe Tragedy: No Oil & No threat to Israel
TIME covers – Sept 16, 2013
Nobel Peace Prize in the offing ? Putin or Snowden ?
Gold vs. S&P from 2003
S&P 500 (red) & Comex Gold (blue) 3.700
Weekly Averages rebased to Dec 31, 2002
GOLD
Logs of price for visual comparability 3.600
3.500 Gold bottoming
3.400
S&P Topping May / Jan
3.300 $1040 Barron's 3.200
3.100
3.000
2.900
Barron's Insight - 4-Oct-09
14 Dec-
13 Dec-
12 Dec-
11 Dec-
10 Dec-
09 Dec-
08 Dec-
07 Dec-
06 Dec-
05 Dec-
04 Dec-
03 Dec-
02
31-Jan-14
Did "STILL" exclude the prior 7
2.800
Dec-
S&P 500
"Gold Is Still a Lousy Investment!"
My Biases? 4 Public Companies
CEF – Central Fund of Canada 1,694,644 Oz Au 76,964,103 Oz Ag ($3.7 bil Mkt Cap - 5% NAV Discount!) -------------
GTU - Central Gold-Trust 2.4 mil oz Au 80 mil oz Ag ~$5 bil Mkt Cap in Au/Ag Related
704,652 Oz Au ($881 mil Mkt Cap - 6% NAV Discount) -------------
SBT-T Units - Silver Bullion Trust 3,143,830 Oz Ag ($65 mil Mkt Cap - 3% NAV Discount) -----------------------------
DCNPF - Duncan Park (Exploration) ($1 mil Mkt Cap)
3.5000
S&P Composite Secular Trends 1900 - 2013
SPX Secular Uptrends NOT “Normal” 3.0000
2.5000
Blue Dots are only 38% of 112 Years shown
1982 / 2000
Secular Uptrends Average BEAR Cycle
-20% over 7 Months (1949-1966 & 1982-2000) 1949 / 1966
2.0000
1921 / 1929 1.5000
"Other" Secular periods Average BEAR Cycle -32% over 18 Months (1900/21, 1966/82 & 2000/16?) (Excluding 1929/42)
1.0000 Logs of price 0.5000
20 Jan-
10 Jan-
00 Jan-
90 Jan-
80 Jan-
70 Jan-
60 Jan-
50 Jan-
40 Jan-
30 Jan-
20 Jan-
10 Jan-
Jan-
00
27-Jan-14
2.500
7 -0
3.000
S&P Composite "Other" Secular Phases
ct O
S&P Secular Phases Average BEAR Cycle
3.500
-20% over 7 Months (1949-1966 & 1982-2000)
62% of the time 1900 / 2013
2.000
1.500
Average BEAR Cycle
-32% over 18 Months
1.000
(Excluding 1929/32) 0.500 Logs of price
27-Jan-14
20 Jan-
10 Jan-
00 Jan-
90 Jan-
80 Jan-
70 Jan-
60 Jan-
50 Jan-
40 Jan-
30 Jan-
20 Jan-
10 Jan-
Jan-
00
0.000
Gold vs. Dow from 1885 Jan'80 1.0x
Aug'96 1.0x
1 1.5x Oz
Jul'32 2.0x Apr'42 2.8x
Dec-74 3.2x 3x Oz
9-Sep-11 5.9x 7.1x Mar-09
Median Ratio 1968-2012 = 9.5x 1885-2012 = 5.0x
10
18.3x Sep'29
Gold Vs. DJIA from 1885
27.7x Feb'66 43.7x Sep'99
31-Jan-14 12.6 Oz DJ 15,700 Gold $1,251
Jun21
Jun13
Jun05
Jun97
Jun89
Jun81
Jun73
May -65
May -57
May -49
May -41
May -33
May -25
May -17
09 Apr-
Apr-
01
100 From Jan 1885 Weekly
Gold vs DowRatio recent Dow/Gold
100
(Monthly Average Values with 24mo MA)
G B
Aug -7
1
d ol
Jan-66 28x
Aug-99 42.4x
ld Go
10
B D ow
Aug-76 8.9x
ea t
s
Dow Gold Ratio Scale
G ol
ow D
d
ts ea Dec-13 13.4x
ats Be
Sep-11 6.2x
w
Do Dec-74 3.3x
?? Jan20
Jan15
Jan10
Jan05
Jan00
Jan95
Jan90
Jan80
Jan75
Jan70
Jan65
Jan60
Jan55
Jan50
Jan85
Jan-80 1.28x
1
DJI Gold Ratio daily from 1997
100
44.64 Oz 25 Aug 99 40 Oz 30 Oz 21.0 Oz 17-Jul-07 20 Oz 21.1 Oz 4-Feb-03 16.0 Oz 12-May-06
10
7.03 Oz 6-Mar-09
6 Oz
5.75 Oz 22-Aug-11
The Equity Bubble Market
Daily DJI / Gold Ratio with 200 day MA 1997 - 2013
The Market s Crash Oct'07 to
31-Jan-14 12.7 oz
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
Nov-
1
Committee to Save the World
Creators of the TBTF Mantra LTCM Bailout 1998
Glass-Steagle Act Repealed Nov 1999 Commodity Reform Act 2003
NYSE Margin Debt
S&P 500 & Margin Debt (right scale)
3.700
$1,000,00 Jul-07 $381 bil
Dec-13 $444 bil
Mar-00
Margin Debt 3.400
2.800
g-9
8
Feb-09
Oct-02
Logs of S&P Price
3.100
Au
$100,000
Sep-87
Oct-98 LTCM Bailout
Jul-81
2.500 Jan-73
$10,000
Dec-13 Debt $444 bil
S&P 500
Jul-68 2.200
UP $104 Bil Sep/Dec 30% YoY
Aug-82
1.900
(31-Jan-14)
Oct-74
8
2
6
0
4
8
2
6
0
4
8
2
6
0
4
8
Dec6
Dec6
Dec7
Dec7
Dec7
Dec8
Dec8
Dec9
Dec9
Dec9
Dec0
Dec0
Dec1
Dec1
Dec1
$1,000
Dec5
1.600
Margin Debt - Coppock Peaks
3.500
SPX & Coppock Curves SPX & Margin Debt
Logs of S&P 500
3.000
300%
S&P 500 250%
2.500
200%
Margin Debt Coppock (red) 2.000
150%
1.500
100%
SPX Coppock (blue) 28-Jan-14
16 Dec-
12 Dec-
08 Dec-
04 Dec-
00 Dec-
96 Dec-
92 Dec-
88 Dec-
84 Dec-
80 Dec-
76 Dec-
72 Dec-
68 Dec-
64
50%
Dec-
Dec-
60
1.000
S&P - Trillion $ Bubble?
2000
Fed Balance Sheet ($ Trillion - right) & S&P 500 - (Weekly, 30wk MA)
$4.6 1851
$4.4
1800
$4.2 $4.10 tr 31-Jan-14$4.0
1600
Global Markets Peak Q2'11
$3.8 $3.6
S&P 1370
1400
$3.4 1343
$3.2
FED ASSETS QE3 +$1.25 tril
1200
$3.0
S&P +508 pts (+38%) $2.8
$2.85 tr 30-Nov-12
1000
Trillion $ Bubble?
800
$2.2 $2.0
14 Jun-
13 Dec-
13 Jun-
12 Dec-
12 Jun-
11 Dec-
11 Jun-
10 Dec-
10
$1.8
Jun-
09 Dec-
09 Jun-
08 Dec-
$2.4
(+$79 bil Jan’14)
$1.99 tr 7-Aug-09
600
$2.6
S&PFED and Fed Balance Sheet Sheet S&P and Balance
$1.3 Trillion QE3 Bubble?
3.500
Logs of both series for visual comparability
3.400
3.200
3.100
6.600
6.500
22-Jul-11
Bank Bailouts
Logs of S&P price
3.300
6.700
6.400
19-Dec-08 16-Nov-12
3.000
6.300
6.200
SPX Close Log Fed assets
2.900
Fed Assets Jan 1, 2003 = $0.72 tril Sep 5, 2008 = $0.91 tril Dec 19, 2008 = $2.21 tril Aug 31, 2009 = $1.99 tril Dec 31, 2012 = $2.99 tril Jan 31, 2014 = $4.10 tril
2.800
2.700
6.100
6.000
5.900
5-Sep-08 31-Jan-14
02
03
04
05
06
07
08
09
10
11
12
13
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
2.600
5.800
InvInt quote
I see the rush of the last year as a Fed fueled blow off to put in a 3rd major top of the debt madness secular phase dating from the 1998 LTCM bailout & Glass-Steagall repeal that enabled conversion of the mega banks of Wall Street into casino operators that are too big to bail, fail or jail. (22-Jan-14)
S&P and QE
Most feared animal on Wall Street
2,000
18,000
SPX – Net New Highs & NY Volume SPX & 3 Day MA
Volume & Net New Hi/Low Pressures
16,000
1,500 14,000 Net new 52wk Highs peaked in May
1,000
12,000
9-May-13 22-Oct-13
500
10,000
26-Dec-13
8,000
0 6,000
QE3 may fuel prices but not volume
-500 4,000
2,000
Jun14
Dec13
Jun13
Dec12
Jun12
Dec11
Jun11
Dec10
Jun10
Dec09
Jun09
31-Jan-14
Dec08
Jun08
-1,000
1800
InvInt Bears low since Dec 2005
+120
S&P 500 Weekly (40wk MAs) & II Bulls-Bears Net Sentiment
+100 1600
-50%
-20%
1400
+80
1200
+60
1000
+40 800
+20 600
61.6% Jan 1 Bulls Highest since Oct 2007 Top 14.1% Jan 8 Bears Lowest since Apr 1987?
400
200
? -20
Dec14
Dec13
Dec12
Dec11
Dec10
Dec09
Dec08
Dec07
31-Jan-14
Dec06
Dec05
0
+0
-40
The FED weather update
Low Bridge surprise‌ How’s your day going so far?
Just when you think the worst of it is over, and you see a little light at the end of that tunnel......
TOTAL POPULATION
Pop Jobs & NILF Down 1.2 mil from Jan'08
Population & "Jobs"
200
Private Payrolls
Rebased: Jan 1975 = 100
190
PRIVATE PAYROLLS Not in Labor Force
Sep-07
Jan-2000 169.2
Rapid Job Growth 1982 - 2000
From Jan 2000
170
LS L O
TE A V
P
160
R AY
156.6 150
I PR
Total Population +0.87% p.a. Up 36.1 mil from Jan'00 Up 13.6 mil from Jan'08
Pop + 36.5mil Jobs + 6.0 mil NILF +22.7 mil
177.1 180
Se p
-0 7
140
130.7 L
A TOT
N ATIO L U POP
130
NOT IN LABOR FORCE
120
117.1 Up 13.3 mil from Jan'08 110
100
Jan15
Jan10
Jan05
Jan00
Jan95
Jan90
Jan85
Jan80
Jan75
Dec-2013 Data
SPX & Jobs & NILF
Secular Trend 2000 / 2017?
3.100
315
th w ro G op P x
Non-Farm Employment
2
215
h wt o r G op P x
1.900
2.1
1.600
A
C
B
115
Dec04
Dec00
Dec96
Dec92
Dec88
Dec84
Dec80
Dec76
Dec72
27-Jan-14
Dec68
Dec64
1.300
165
NOT in Labor Force "NILF"
Dec16
2.200
rebased to Jan'75 = 150
Dec12
2.500
265
S&P, Jobs & NILF
Dec08
2.800
Logs of Stock Prices
S&P 500
& U.Mich Consumer Sentiment SPX &SPXConsumer Sentiment
3.400
150.0
3.200
3.000
Logs of S&P Price
140.0
130.0
120.0 Jan-00
110.0 Jan-04
2.800
Jan-07
100.0
Jul-13
90.0
2.600 80.0
70.0
Univ Michigan Consumer Sentiment with 6 Mo MA
2.400
17-Jan-14 prelim 80.4
14 Dec-
12
50.0
Dec-
Dec-
08 Dec-
06 Dec-
04 Dec-
02 Dec-
00 Dec-
98 Dec-
96 Dec-
94 Dec-
92 Dec-
90 Dec-
10
Aug-11
2.200
60.0
1000
SPX & Personal Savings Rate
16.0
US Personal Savings Rate (scale right) S&P 500 (restated 1949 =10, log scale left)
14.0
12.4% Dec-81
2000 to 2009
12.0
DEBT/GDP Ratio went crazy
10.0
1966 to1982 8.0
100
6.0
1950 to1965
4.0
1982 to 2000 Stocks & Debt/GDP 3.7% Sep-99 soared Savings collapsed
2.0 2.3 Sep-05
0.0
Dec14
Dec10
Dec06
Dec02
Dec98
Dec94
Dec90
Dec86
Dec82
Dec78
Dec74
Dec70
Dec66
Dec62
Dec58
Dec54
Dec50
10
Savings Rate Trying to turn up
S&P and DEBT/GDP
1000
Total Credit Market Debt/GDP Ratio (scale right) S&P 500 (1949 =10, log scale left)
4.0
S&P 500 3.5 3.75 Mar-09 3.0 2.58 Mar-00
1966 to1982 100
2.5
1950 to1965
1982 to 2000 1.63 Mar-82
2000 to 2009 DEBT/GDP Ratio went crazy
2.0
Stocks & Debt/GDP soared Savings collapsed
1.5
0
4
8
2
6
0
4
8
2
6
0
4
8
2
6
0
4
8
Dec5
Dec5
Dec6
Dec6
Dec7
Dec7
Dec7
Dec8
Dec8
Dec9
Dec9
Dec9
Dec0
Dec0
Dec1
Dec1
Dec1
1.0
Dec5
10
Debt GDP: Consumers & Fed Govt
Household & Government Debt/GDP Ratios
Gross Fed Debt/GDP
1982 / 2008 Consumer Borrowing Binge 45% to 95%
Ho us eh ol ds
Household Debt/GDP
Gross Federal Debt
110%
100%
90%
80%
Mar-03
(new GDP series)
70%
Jun-00
Sep-08
60%
Gross Federal Debt from 61% to 102% in 5 Years
50%
40%
30%
Dec-13 Data Q3-13
Sep-82
6
0
4
8
2
6
0
4
8
2
6
0
4
8
Dec-6
Dec-7
Dec-7
Dec-7
Dec-8
Dec-8
Dec-9
Dec-9
Dec-9
Dec-0
Dec-0
Dec-1
Dec-1
Dec-1
20%
ShadowStats Cons Debt ex-Student Loans
Student loans don’t fuel much Consumer economic demand
Student Loans > Credit Card Debt Estimates now show more than $1.2 trillion in student loan debt across the nation,
more than the nation owes on credit cards. News 25-Nov-13
Jane & Joe Six-Pack Are NOT borrowing to spend‌
Logs of Price
2.3
The Exciting “Recovery” in Housing
US Housing Starts “Recovery”
4.6 4.2
HGX Phlx Housing Sector Index (Logs of Price)
3.8 Nov-13 3.49
Mar'13 3.18
2.1
3.4 3.0 2.6
1.9
2.2
4 Jun-1
3 Dec-1
3 Jun-1
2 Dec-1
2 Jun-1
1 Dec-1
1
1.4
Jun-1
Dec-1
0 Jun-1
9 Dec-0
9 Jun-0
8 Dec-0
8 Jun-0
0
1.66 Feb'11
1.56 Apr'09
1.7
1.8
US Housing Starts per Capita Starts per 1000 US Population
Logs of Price
2.5
2.3
HGX & Per Capita Starts from 2002
10.0
HGX Phlx Housing Sector Index (Logs of Price)
9.0 8.0
7.0
7.0
2.1
6.0 5.0 1.9
Nov-13 Mar-13 3.44
US Housing Starts per Capita Starts per 1000 US Population
4.0
3.18 3.0
1.7
“Recovery” vs.“The Bust” What are the stocks smoking?
2.0
1.66
1
2
3
4
5
6
7
8
9
0
1
2
3
4
Dec-0
Dec-0
Dec-0
Dec-0
Dec-0
Dec-0
Dec-0
Dec-0
Dec-1
Dec-1
Dec-1
Dec-1
Dec-1
1.0
Dec-0
1.5
100
10000
Housing Housing Starts per capita from 1959 Starts Raw Data (Seas Adj) & per capita (per 1000 Population) Jan-06 2273 Nov-13 1107
10
1000 7.64
478
4.27 Oct-66
3.49 Nov-13
PER CAPITA 1960 / 2012 Population rose by 75% (180 mil to 315.6 mil)
1.56 Apr-09
58
62
66
70
74
78
82
86
90
94
98
02
06
10
14
18
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
De c -
100
De c -
1
“Recovery” ?
3.250
1000
S&P 500 S&P & Mtg Debt & CS Home prices (logs left)
&
Mortgage Debt O/S
CS Homes Index (rebased, logs left)
&
Mortage Debt
B
(rebased/scale right)
S&P/C-S Home Price Index
2.750
A ABS Issuance Bonanza 2.500
Rebased to 150 Dec-89
Sep-13 Debt = 623 4.2x 1989
Stock prices & Home Prices Fell
Oct-13 Home Price = 327 2.2x 1989
90
94
98
02
06
10
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
29-Jan-14
14
86
100
Dec-
2.250
Stock Prices fell Home prices rose
The $2 tril Gap
C
Dec-
3.000
2.500
HGX & CS Home Price & Debt Banks Topped Jan'07
HGX - 294 Jul-05
Mortgage Debt Outstanding (Rebased)
257 Feb-07
HGX Index Home Builders Stocks
1800
1600
Logs of price
S&P 500 Topped
2.300
210
1400
133 Apr-10
121 Feb-11
Home Prices & Mortgage Debt Soared
2.100
Oct-03 1.900
1200
1000
SP/CS Home Price Index 20 Cities
Oct-11 74
Mar-09 54
800
02
03
04
05
06
07
08
09
10
11
12
13
14
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
28-Jan-13
Dec-
1.700
Mtg Debt & Home Prices
1800
Mortgage Debt & Home Prices (CS-20 National) rebased
Mor tgag
1700
e De
bt O S
Apr'09 $3.2 Trillion More Mortgage Debt than June 2004
1600
1500
1400 $2.0 Trillion More Mortgage Debt than June 2004
1300
Dec-13
Ju 4 n-0
1100
1000
SP/CS Home Price Index 20-National
09
10
11
12
13
14
Dec-
Dec-
Dec-
Dec-
Dec-
900
Dec-
Dec08
7
06 Dec-
Dec0
05 Dec-
4 Dec0
03
Who’s the FED buying the MBS from? Dec-
1200
According to the Mortgage Bankers Association Applications have declined in 16 of the last 21 weeks to Sep 27th & continue to fall
TNX – 10 Year Yield
Taper Talk ?
New Debt Bubble?
60% of New Corp Loans are “Cov Lite” ($250 bil) vs $95 bil in 2007)
Who’s going to bail out Hu ? Uncle Sam?
Logs of prices
3.700
S&P 500 S&P & World Ex-USA 3 Peaks from ‘95 with 40wk MA
LTCM Bailout Sep'98
B
A
3.500
3.20
14-Sep-12 QE3 & QE4
3.00
C ?
2-Nov-07
MSCI World Ex-USA (US$) 3.300
6-May-11
17-Jan-14 2.80
7-Apr-00
3.100
2.60
6-Mar-09
2.900
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
2.40
& Euro Stoxx 50 from 1998 SPXS&P&500Eurostoxx with 40wk Mas - (Logs of price)
4.000
3.20
3.900
3.10
S&P 500
3.800
QE2
Logs of Prices
3.700
3.600
3.300
3.00
2.90
2.80
LTRO
3.500
3.400
QE3 & QE4
2.70
2.60
SECULAR TREND PEAK LTCM
Euro Stoxx 50
2.50
Bailout 31-Jan-14
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
ec-9
ec-9
ec-0
ec-0
ec-0
ec-0
ec-0
ec-0
ec-0
ec-0
ec-0
ec-0
ec-1
ec-1
ec-1
ec-1
ec-1
2.40
ec-9
3.200
C$ & A$ Long term
A$ broke 95 cents‌ Canada ?
Nov-07 Japan – Nikkei // Weekly with 40wk MA Messing up RegionalApr-11 Growth?May-13
4.600
2.600
4.400
2.400
4.200
2.200
4.000
Logs of price
2.800 Asia-Pacific Ex-Japan MSCI
Japan - Nikkei 255 Weekly Average Logs of price
31-Jan-14
Dec14
Dec13
Dec12
Dec11
Dec10
Dec09
Dec08
Dec07
Dec06
3.800
Dec05
Dec04
2.000
Japan’s devaluation – disruptive to Regional trade?
JAPAN 1981 - Nikkei 225 Weekly Japan – Nikkei from 38,958 Jan'90
4.6000
1982 - 2013
(Logs of price) 104wk MA
Japan’s devaluation – Nikkei at big resistance 4.4000
Logs of price
4.2000
18,300 Feb-07 & July-07 Jan-14 16,320
4.0000
Nov-11 8,136
Apr-03 7,700
Oct-08 6,995
1
5
9
3
7
1
5
9
3
ec-8
ec-8
ec-8
ec-9
ec-9
ec-0
ec-0
ec-0
ec-1
3.8000
SPX-CopperS&P 500
1.300
3.2
Comex Copper & S&P 500 Wk Avg with 40wk MAs
Wkly Avg
3.1
1.050
3.0
0.550
Logs of Price
0.800
Feb-11
2.9
2.8
Comex COPPER
0.300
Weekly with 40wk MA
2.7
31-Jan-14
Dec14
Dec13
Dec12
Dec11
Dec10
Dec09
Dec08
Dec07
Dec06
2.6
Dec05
Dec04
0.050
1.250
Pac-Ex-Japan & Copper
MSCI PACIFIC EX-JAPAN
2.80
Nov-07
Apr-11
May-13 Oct-13
2.70
1.050
2.60
2.50
0.850
2.40
0.650
0.450
Logs of Price
Feb-11
2.30
2.20
Comex Copper
2.10
Pacific Ex-Japan Stock Markets & Comex Copper Weekly
0.250
2.00
with 40wk MAs (Logs of Price) 31-Jan-14
Dec14
Dec13
Dec12
Dec11
Dec10
Dec09
Dec08
Dec07
Dec06
1.90
Dec05
Dec04
0.050
Pac-Ex-Japan & Copper
SPX-Copper-SPGSCI (Logs of Wk Avg Price) 3.300
3.100
S&P 500
1.40
1.20
1985 / 1999
FTXL
1.00
2.700
0.80 SP-GSCI Commodity Index
LOGS of price
2.900
2.500
0.60
2.300
0.40
Comex COPPER
6
0
4
8
2
6
ec-0
ec-0
ec-0
ec-1
ec-1
-0.40
ec-9
1.500
2
-0.20
ec-9
1.700
8
0.00
ec-8
1.900
4
0.20
ec-8
2.100
Copper, Silver & Gold from 1995 100
10.00
Copper & Silver & Gold Wkly from 1995 First Cycle of New Secular Uptrend (rebased) confirmed by 2003 & 2005 breakouts?
Copper NY (rebased x1.5)
? 10
1.00
Silver NY
Gold NY (rebased) 31-Jan-14
1
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
0.10
Comex Gold – must clear $1362 & $1433 2000
QE3 & 4-ever?
Comex Gold Near Active with 50 & 200 Day MAs
1900 1800 1700 1600 1500
1432.5 28-Aug-13
1431
1362 1400 28-Oct-13
1265
1300
1226 1200
20-Sep-13 $2642
1100
15-Nov-13 50-Day MA $1309 - falling 200-Day MA $1396 - falling
1000 900
22-Nov-13
13 Dec-
13 Sep-
13 Jun-
13 Mar-
12 Dec-
12 Sep-
12 Jun-
12 Mar-
11 Dec-
11 Sep-
11 Jun-
11 Mar-
10 Dec-
10 Sep-
10 Jun-
10 Mar-
09 Dec-
09 Sep-
09 Jun-
Mar-
09
800
Breakout runs
The Gold Bull -
E?
London Fix - Logs of Price Weekly
Sep'11 $1910
The Key Breakout Runs 3.300
73% in 70wks?
D +111% May'08 $1020/$1030
3.100
C
$1650/$1520 Well tested
+61%
May'06 $726/$732
"What if‌"
2.900
Logs of Price
B
(Breakout above $1800) ---
+75%
2.700
20-Sep-13 $2642 ?
$428/$454
A $300/$328
A/D Average Gain 73% & Duration 70wks from May'12 low
+45%
2.500
D ec
13
8-Nov-13
D ec -
12 D ec -
11 D ec -
10 D ec -
09 D ec -
08 D ec -
07 D ec -
06 D ec -
05 D ec -
04 D ec -
03 D ec -
02 D ec -
01 D ec -
00 D ec -
99 D ec -
D ec -
98
2.300
IAU+GLD MT / IAU price Jun'07 to Mar'09 Bear Stearns Fund Crisis Bailouts/Tarp +685 mt No Price Breakout?
GLD + IAU Tonnes (Red) (scaled adjusted) IAU Share Price (Gold proxy) (Blue)
100
31-Dec-12 1569 mt
16-Jan-14 951 mt
618 mt Out of GLD & IAU in 2013
14 Jun-
Dec13
13 Jun-
Dec12
12 Jun-
Dec11
11 Jun-
Dec10
10 Jun-
Dec09
09 Jun-
Dec08
08 Jun-
Dec07
07 Jun-
Dec06
06 Jun-
Dec05
05 Jun-
Dec04
Germany only got 5 mt from NY Fed ?
100
IAU: 20% of Tonnes & 4% of $Val Trading ? IAU vs. GLD Tonnes & $Value of Trading Volume 20.0% IAU Tonnage % Series1 IAU Cut Fee from 40 Series2 bps to 25 bps Series3 & 10:1 Split 15.0% 24-Jun-10 Linear (Series2)
$2
16-J ul-12
GLD (Market Share)
$2
20% of Gold 4% of trading?
$1
$1
$1 10.0%
IAU
m g Do n i d Tra
i...
$1
$1
5.0%
inant
-14 -Jun
-14
$6
-Mar
-13
3.5% 31-Oct-13
-Dec
-13 -Jun
-13 -Mar
-12 -Dec
-12 -Sep
-12 -Jun
-12 -Mar
-11 -Dec
-11 -Sep
-Jun
-11 -Mar
-10 -Dec
-10 -Sep
-10 -Jun
-11
GLD?
0.0%
$8
-13
Robo trading dominates
3.8% 29-Apr-13
-Sep
Dom ding a r T GLD
10000
Gold 50MA vs 200 DMA from 1980 The nature of secular trend – persistence . Jun'01 to Feb'13
10000
50 MA crossed ABOVE 200 MA - 20-Sept12
532 Wks Blue & 79 Wks Red (13% of time)
Reversed it 22-Feb-13 Comex GOLD (near active) with 200 DMA
4 Previous Long Consolidations Resolved on the upside
Periods of 50 DMA Below 200 DMA in Red
1000
1000
22-Nov-13 50 Day MA 1309 falling 200 Day MA 1396 falling
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
10
12
14
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
Jun-
100
Jun-
100
Gold & Silver VERY related
2.000
4.000
1.500
Logs of price
1.000
3.500
SILVER (London Monthly Logs of price)
3.000
0.500
2.500
London GOLD Monthly Average
0.000
2.000
Dec14
Dec09
Dec04
Dec99
Dec94
Dec89
Dec84
Dec79
Dec74
Dec69
Dec64
Dec59
1.500 Dec54
Dec49
-0.500
Silver & Ag/Au Ratio
2.000
1.0
London SILVER &
Silver/Gold Ratio Inverted Mo Average, with 12 Mo Avgs (logs of price)
1.000
0.500
Logs of Price
1.500
10.0 15.6 18.5
17.2
18: 1 to 45: 1 Ratio prevailed 1950/1982
Apr-11 31.8 to 1
45:1 to 80:1 Ratio prevailed 1984/2011
0.000
New Range? 30:1 / 65:1
Jun-73 46.5
Silver/Gold Ratio Monthly Averge of Daily Inverted
100.0
an-15
an-05
an-00
an-95
an-90
an-85
an-80
an-75
an-70
an-65
an-60
an-55
an-50
an-10
Dec-08 79.3 to 1
-0.500
SILVER
3.800
400.0%
3.400
11 29 -D
ec -
7-Mar-08 11-May-06
2
350.0%
300.0% 1 nJu 26
14 -S ep -10
3.200
1O ct -1
3.600
29 -F eb -1 2
& 200 Day VsMA Ratio
28 -J un -1 2
23 -A
ug -1 1
Comex Silver Price Log 25-Apr-11
3
250.0%
Lower Peaks
28-Aug-13 - 25.12 Oct 1-12 - 35.45
3.000 12-Apr-04 27-Oct-08 19-Apr-06 169%
2.800
Feb 29 - 37.48 Aug 23 - 44.28 Apr 25 - 49.82
29-Apr-11 174.6%
200.0%
150.0% 2.600
100.0%
2.400
4
Dec-1
3
50.0% 31-Jan-14
Dec-1
2 Dec-1
1 Dec-1
0 Dec-1
9 Dec-0
8 Dec-0
7 Dec-0
6 Dec-0
5 Dec-0
4 Dec-0
3 Dec-0
Dec-0
2
2.200
TSX VsMa Venture Index from 2003 Ratio 13wk/40wk
3.800
a -J
l Ju 1-
24
1.2
14 n-
1 -1
3.600
Logs of price level
3.400
1
0.8
136 wks 13wk MA BELOW 40wk MA Jul'11 to Jan 31, 2014
92 wks
0.6
13wk MA BELOW 40wk MA Aug'07 to Jun'09
3.200
0.4
0.2
0 3.000
TSX Venture Composite Index (JX-I) - Weekly with 13 & 40wk MA Ratio
Jul'04-May'07 +133% - 34 mos May'07-Dec'08 -80% - 20 mos Dec'08-Mar'11 +163% 27 mos Mar'11-Jul-13 -65% - 28 mos
-0.2
2.800
03
04
05
06
07
08
09
10
11
12
13
14
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
-0.4
ZJG-T
Junior Gold Index Crash
BMO Junior Gold ETF
30.00
Gold miners drop over 50% with no bottom in sight.
(34 Stocks) NAV Daily 6-Dec-10 with 20, 50 & 200 MAs 24.85
Tax-loss selling of mining stocks add insult to injury; patient investors have a chance.
8-Sep-11 24.26
25.00
Marketwatch ‌ 6-Dec-13 (8.05AM EST) 21-Sep-12 16.88 5-Jun-12 15.49
20.00 50/200 Cross
15.00
23-Jul-12 12.60
16-May-12 12.36
10.00
13
23-Dec-13 5.00 $5.74
Dec-
13 Jun-
12
17-Apr-13 $7.44 26-Jun-13 $6.40
Dec-
12 Jun-
11 Dec-
11 Jun-
10
Now 26 stocks Down from 34 yr ago
Dec-
10 Jun-
Dec-
09
C$86 mil Assets 1-Feb-13 C$40.5 mil assets 21-Jun-13 C$46 mil assets 2-Oct-13 26 Stks C$39.8 5-Dec-13
Gold vs. S&P from 2003
S&P 500 (red) & Comex Gold (blue) 3.700
Weekly Averages rebased to Dec 31, 2002
GOLD
Logs of price for visual comparability 3.600
3.500 Gold bottoming
3.400
S&P Topping May / Jan
3.300 $1040 Barron's 3.200
3.100
3.000
2.900
Barron's Insight - 4-Oct-09
14 Dec-
13 Dec-
12 Dec-
11 Dec-
10 Dec-
09 Dec-
08 Dec-
07 Dec-
06 Dec-
05 Dec-
04 Dec-
03 Dec-
02
31-Jan-14
Did "STILL" exclude the prior 7
2.800
Dec-
S&P 500
"Gold Is Still a Lousy Investment!"
Gold, SPX & Gold Miners from 2003 GOLD 9-Sep-11
S&P 500 (red) & Comex Gold (blue)
3.700
Weekly Averages
rebased to Dec 31, 2002
Logs of price for visual comparability 3.600 4-Dec-09 10-Dec-10
3.500
14-Mar-08
3.400
12-May-06
GDM Gold Miners
3.300
3.200
5-Dec-03
23-Apr-10 3.100
S&P 500
3.000
2.900 31-Jan-14
Dec13
Dec12
Dec11
Dec10
Dec09
Dec08
Dec07
Dec06
Dec05
Dec04
Dec03
Dec02
2.800
GDM vs. Gold from 2003GOLD
Comex Gold & Gold Miners Index Weekly Averages rebased to Dec 31, 2002 Logs of price for visual comparability
3.700
E
3.600
C
9-Sep-11
4-Dec-09
10-Dec10
3.500
B
21-Mar-08
21-Sep-12
3.400
12-May-06 3.300
A
3.200
5-Dec-03
5-Feb-10
GDM Gold Miners
3.100
23-Aug-13
F
3.000
31-Oct-08
Miners vulnerable to "S&P Risk" 2.900
28-Mar-03
Implicit Profit Leverage of Producers is a myth. (Capital intensive, Energy costs, Dilutive M&A Premiums & Geo-political risks)
20-Dec-13
false breakout?
D
31-Jan-14
14 Jun-
3 Dec1
13 Jun-
2 Dec1
12 Jun-
1 Dec1
11 Jun-
0 Dec1
10 Jun-
9 Dec0
09 Jun-
8 Dec0
08 Jun-
7 Dec0
07 Jun-
6 Dec0
06 Jun-
5 Dec0
05 Jun-
4 Dec0
04 Jun-
3 Dec0
03 Jun-
Dec0
2
2.800
Gold
"Old Boys Club" Tonnes 1 2
United States Germany IMF
3 4 5 6 7 8
Italy France Switzerland Japan Netherlands
9
ECB
10
16
Portugal United Kingdom Spain Austria Belgium Sweden BIS
17
Greece
18
Australia Denmark Finland
11 12 13 14 15
19 20
Top 20
% of reserves
FX Reserves
$3,681 $516 $291 $149 $413 $21 $723 $84 ? $168 $26 $272 $49 $176 ?
1,054 1,015 558 442 424 503 323 193 174 152 140 127 125 123 117
$345 $49 $107 ? $97
104 104 103 79 78
1.2% 8.3% 8.4% 16.0% 4.0% 65.6% 1.8% 9.8% 3.7% 3.8% 25.1% 2.0% 10.6% 3.0% 3.9% 1.3% 8.6% 4.1% 9.6% 3.5%
Gold % of reserves Tonnes
115 112 80 67 49
76% 6% 3% 19%
China* Russia India Turkey Taiwan Venezuela Saudi Arabia Phillipines Algeria Thailand Kazakhstan Singapore* South Africa Mexico Libya South Korea Romania Poland Kuwait Indonesia
24,176
30%
Egypt
$18
76
17.1%
Brazil
$362
67
0.8%
$7
64
8,134 3,391 2,814 2,452 2,435 1,040 765 613 502 383 310 282 280 228 126
World "Official" Gold 31,914 20 'Old Boys' own 25 Major Emerging
70% 66%
Emerging Countries
65% 65% 8% 2% 52% 27% 84% 12% 23% 48% 33% 7%
tonnes
76% 20%
Pakistan Argentina
32.8% 62 7.6%
$31
Malaysia
$136
36
$7,720
6,242
1.1%
WGC Dec'13 data (6-Jan-14) FX Reserves - Economist2-Jan-14 & IMF Stats
(median %)
4%
Who owns the “official” gold ------Who owns $7.7 tril of who’s paper?
Global Currency Transition Bretton Woods 1949/1971 Then G3 or G7 to 2009
£sd to
¥ € $ Yes we can ?
US$
€ (DM)
¥
Gold BRIC’s say NO You can’t…
Zim Inflation $100 Trillion (2008)
Gono might have been available, but he picked Yellen‌
Russian Gold Reserves
notes
0.500
Fiats vs. Gold from 1946
2.5
BP, US$, Euro/DM & Yen vs. GOLD (Logs of Monthly Average)
Fiat Currencies vs. Gold Lose value over time
BP/oz
1.000
1971 / 1980
3.0
(Bretton Woods Discipline 1950/71)
US$/oz
1.500
3.5
DM-Euro/oz 2001 / 2015?
2.000
4.0
Yen/oz 2.500
4.5
3.000
5.0
31-Jsn-14
Jan16
Jan11
Jan06
Jan01
Jan96
Jan91
Jan86
Jan81
Jan76
Jan71
Jan66
Jan61
Jan56
5.5 Jan51
Jan46
3.500
10
Major Forex vs. Gold from 1998 Last New FX Paper Lows US$ - Sep 2011 Euro - Oct 2012 Yen - Feb 2013
Euro/oz
Major Forex Vs. Gold Weekly - from 1999 Lows Rebased
Yen/oz
US$/oz Dec14
Dec13
Dec12
Dec11
Dec10
Dec09
Dec08
Dec07
Dec06
Dec05
Dec04
Dec03
Dec02
Dec01
Dec00
Dec99
Dec98
31-Jan-14
10
Gold & DXY
2.1000
2.4000
Logs of Gold & DX Index (Weekly Average Values)
DXY Index Blue Gold INVERTED Red
2.0500
2.5000
2.6000 2.0000
US$ Vs. Gold Rising vs. Paper but not vs. Gold
US$ & Gold NOT Agreeing
2.7000
1.9500
2.8000
2.9000
1.9000
US$ & Gold NOT Agreeing
3.0000
1.8500
3.1000
3.2000
3.3000
ec-1 4
ec-1 3
ec-1 1
ec-1 0
ec-0 9
ec-0 8
ec-0 7
ec-0 6
ec-0 5
ec-0 4
ec-0 3
ec-0 2
ec-0 1
31-Jan-14
ec-0 0
ec-9 9
1.7500
ec-1 2
1.8000
US$ trying to be BLHiGF ?
C$ & A$ Breakdowns C$ 6-Nov-07
C$ and A$ vs. US$ Daily
WSJ Spot Daily with 200 Day MAs
1.15
29-Jul-11 1.10
A$ Jul-08
1.05 1.00
C$ in US$ 0.95 0.90 0.85 0.80 0.75
A$ in US$
0.70 0.65 0.60 0.55 0.50 31-Jan-14
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
0.45
Gold vs Gold Stocks From 1934
Gold (blue) & Gold Miners (US$) (red)
4.500
from 1934 (logs of price)
3.0000
4.000 1968 to 1980 Run
3.500
2.5000
GDM (pre'93 TSEG-US$)
3.000
Gold Price PM Fix
Logs of price
Shs Metal Ratio US$ Poly. (Shs Metal Ratio US$)
2.500
2.0000
2.000
1986 to 2011 Range
1.5000
1.500
1.000
1.0000 0.500
Gold Miners /Metal Ratio
Shares Lagged Metal 1968 / 80
0.5000
(scale right - not log scale)
33
38
43
48
53
58
63
68
73
78
83
88
93
98
03
08
13
18
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
Dec-
0.000 31-Jan-14
GLD vs GDX (Metal vs Shares) 5 Yrs
GDX & GDXJ vs GLD (Metal vs Shares) 2 Yrs
Gold &GoldMkt & MarketVane Vane Bulls Bulls
3.100
Logs of price
3.350
22
with 40wk MAs
20
18 In Secular Bear Markets, assume a range of 20% to 50% Bulls.
2.850
16
14
In Secular Bull Markets, assume a range of 50% to 80% Bulls (I.M. 2001)
12 26-Aug-11 89%
Secular Bear 2.600
10
5-Oct-12 76%
80
60 2.350
16-Jun-06
11-Apr-03
1-Jun-12
21-Nov-08
40
19-Apr-13 wk - 41% 25-Jun-13 wk - 37% 15-Nov-13 wk - 35% 6-Dec-13 wk - 33% 31-Jan-14 wk - 41%
4
6
8
0
2
4
6
8
0
2
4
Dec9
Dec9
Dec0
Dec0
Dec0
Dec0
Dec0
Dec1
Dec1
Dec1
0
Dec9
2.100
20
This wk 33% (4-Dec-13)
- 11th wk under 40% since 2001 – (16wks-Jan 7th)
London Gold Fix Questions
German Regulator BAFIN declares possible price manipulation in precious metals is worse than the Libor rigging scandal. (Jan 16, 2014)
Jan 17th Deutsche Bank announces withdrawal from the London Fix… “There is a lot of contractual business done on the basis of the London Fix. If there’s no basis for the fix, somebody is going to get hurt…”
550
1998-2004 & UK Gold Sales NMR & AIG Leave LBMA AngloGold Swallows Ashanti in 2004
Brown Bottom in Gold 2001 Commodity Reform Act 2003
Glass-Steagall Repealed Nov'99
blo ws dg ing
400
mb
ior
he
Ashanti Hedges Blow up on Central Bank Agreement to limit selling Sep'99
450
Germany Repatriates 500mt from London in 2001
up
Greenspan: "CBs ready to lease gold in increasing quantitites should the price rise" 24-Jul-98
500
12-Apr-04 NM Rothschild quits LBMA 421.90
Ca
The Breakout Dec 2002 333.00 US invades Iraq 20-Mar-03
LTCM Bailout
350
395.50 AIG quits LBMA 1-Jun-04
300
Oct’09 India bought 200 tonnes from the IMF at $1045
The "Brown Bottom in Gold" 56% of UK Gold Reserves -Sold Average of
$275.60 (395 tonnes bewteen July 1999 - March 2002)
250
05 Dec-
05 Jun-
04 Dec-
04 Jun-
03 Dec-
03 Jun-
02 Dec-
02 Jun-
01 Dec-
01 Jun-
00 Dec-
00 Jun-
99 Dec-
99 Jun-
98 Dec-
98 Jun-
Dec-
97
200
Humility
Dealing with Mr Market ----
Learn Humility
Patience My Ass, I’m Going to Kill Something ! ‘Opportunity’
rarely happens at your convenience
Bad buying causes losses
Dogs slide Feb 2010
Zermatt – February 2010