drbubb

Here's an example of flawed logic: What is really scary about gold breaking the $1000 barrier is that it happened in the face of a flood short selling in US futures markets. So while gold was being driven up by Hong Kong buying, it has also been getting killed by unrelenting selling during COMEX hours. As can be seen in the chart below, the quantity of COMEX gold futures contracts has begun spiraling out of control since the end of August. If Open interest is rising, you could equally argue that there has been a Flood of Buying by Hedge Funds. That would be a more accurate way describing what is going on. Hedge Funds typically do not have a very long time horizon. So they are long gold "with a finger on the sell trigger." If gold falls, and hits their stops, you could easily see wave after wave of Hedge Fund sellers. Believe what you want, but I find the article flawed.

That is a poorly written article, full of logical flaws. (I would be embarrassed if my name was on it - Want examples?) I think the Gold Bulls are about to get CREAMED. They have stopped using their brains (if this poor article is any indication) and are operating on pure emotion. Bring on the Truth detector !

This could break very, very soon. My GDX Warning chart suggests an important break may be coming this week

From the GDX Warning thread Two New charts: THE GDX WARNING ... update I could see Gold prices returning to "the Green Line" ...where there should be some important support

Other related links: ==== GF's Long Term Gold ideas :: http://www.greenenergyinvestors.com/index.php?showtopic=7921 GF's Gold Ratio charts ...... :: xx (to be created) DrB's GDX Warning thread :: http://www.greenenergyinvestors.com/index.php?showtopic=6677 Gold Watch, COT reports.. :: http://www.greenenergyinvestors.com/index.php?showtopic=7266 (to be added to the first post?) ++ Maybe one or two key charts for the month, like this:

Why wait? I am quite serious about the need to "take to the streets in protest". Many Billions are going to be wasted supposedly "helping homeowners", when the real agenda is to prop up a very over-valued property market on the mistaken assumption that this action might save the election hopes of Labour. I can imagine nothing more odious than that. It is alarming that the other parties are not protesting, but they are afraid to lose support from other homeowners, who might vote against them. To counter these political considerations, it is important that those who are being harmed by these actions: namely, taxpayers and future homeowners show that they know that they are being harmed, and that they are organised, and prepared to take protest action. Future homeowners need to be seen as a political force, who are against this sort of waste, or it will go on endlessly. HPC is an excellent place to begin organising. And a name like "Future Homewners against Financial bailouts" might not be a bad name.

THE GDX WARNING - Flashing Red ! If GDX breaks support at GDX-40 next week, Gold may be in for a big slide

GDX: -5.94% today I am so glad that I have been aggressively selling my precious metals share. I own Puts on GDX, and sold some at more than 2x cost

GDX: -5.94% today I am so glad that I have been aggressively selling my precious metals share. I own Puts on GDX, and sold some at more than 2x cost

Try IG index. They may have something

Sitting in Hong Kong, I am less aware of such (dangerous) policies. Do you agree with my assessment of the possible moral hazard, and chances for cheating?

PIXEL, KINDLY TALK STRAIGHT ! What actually happened after my mid-May posting? Gold rose for a few days, and then slid and traded sideways for two months. A little later, I suggested that Gold would be a BUY in late August. Go back and read the thread, if you have any doubts. As you know, we retained the Title, which was not the original titlle, in order to give a forum on GEI for those who were not knee-jerk Gold Bulls. How was YOUR CALL, Pixel ? Have you done any better with your calls? (Perhaps, your Gold call above is already in Loss - let's track how Gold does from GLD-$xxx, the closing the day before that posting.) I really do not appreciate your spreading misinformation !! You also know that I have never been short gold. I am using SPX puts as my hedge for my remaining Gold longs. As I have said on my DrB's Diary, my net position has been making money over the last several months. Now, as SPX has fallen in recent days, several puts have now gone back in profit Do you think you are doing better with your own positions? Let's run a trading competition through a whole cycle, and see who does better == == == I have used the above, as the basis of a new thread, see: http://www.greenenergyinvestors.com/index.php?showtopic=8118

Can THIS be true ? ... from an SP posting ... That is an interesting comment. Especially this part: " You may not be aware but the government will pay interest on the first £200k of your residential mortgage once you have been out of work for 13 weeks.This should put a stop to repossessions permanently for many." I presume that is a TEMPORARY program. When does it expire? If they leave it in place, it is full of awesome moral hazard. People who are concerned about losing their jobs have a strong incentive to buy a £200k property that they may not be able to afford, because if they then lose their job, the government to pay their mortgage interest. If they were prudent, and remained as renters, would the government pay the rent? It think not. This is typical of the truly breath-taking arrogance and stupidity of the present UK government. They are doing everything they can to encourage property speculation, and reckless behaviour. ( In fact, they may have already wrecked Britain's future - the fear that they were doing so, was one important reason that I left the UK.) The sooner that Brown and his cronies are put into history's dustbin, the sooner the country can get back on its feet. A country with so much of its economy dependent on speculation in overvalued property, and transfer payments, is a disaster waiting to happen. And the disaster has now overtaken the UK. /See SP-post#913517 : http://www.singingpig.co.uk/forums/3/91351...ead.aspx#913517

Very nice chart! After such a big bubble, a longer downturn (than 3-5 years) could be likely

A GOOD DISCUSSION? The Bears have been allowed back on SP, and - for once - I think we have a balanced discussion going. (There are new owners, and so maybe they will let it go on for a while): UK: Time to selldown after the Dead Cat bounce? Is London shrinking? = = = = = = = = C. said: Dr Bubb, you said: "The usual downturn is 3-5 years after the peak. But this one could be 5-6 years because of the error in money policy which has created the current strong Dead Cat Bounce" This smells like smoke and mirrors to cloud the waters and to create some room for manoeuvre - will you plz stick a pin in your best guess for the base date (or "peak") The notion that this "dead cat bounce" forms a new peak is a little farcical - in the real world prices have merely stabilised. = = = = = = = = Not "smoke and mirrors." It's just that it takes 3-4 years from a top to get the banks desperate enough that they are willing to force their marginal borrowers to sell, and to dump most of the property that they acquire through foreclosure - that's not really happening yet. We were on track for a move towards that sort of desperation early this year. But the QE programme of low interest rates, and a agreement amongst the banks to try leniency has delayed that sort of crunch. We won't get a sustainable rally until prices are low enough that they are truly affordable to more buyers, and Buying is cheaper than Renting. The UK market is far from that. Only a few buyers can trick themselves into thinking that buying is cheaper than renting at current prices. To fool themselves that way, they need to use unrealistic estimates of owners' expenses, and unrealistic interest rate assumptions. (Does anyone really think "the lowest rates in British history" are sustainable on a long term basis?) The bottom typically comes after the forced sales have peaked. So maybe in 2012-13. You say the prices have "merely stabilised", but the Halifax and Nationwide indices suggest the market has clawed back almost half of its losses, and some in London are reporting prices as high as the 2007 peak. It will take time to deflate the unrealsitic price ideas that have come back into the market, which is why I think another 3-4 years. = = WHO DRIVES THE MARKET? Banks or Buyers Bank financing terms can drive the market when there are enough eager buyers to soak up the supply, But the market will not always be like that. Demand can slide, when rates go back up, and/or buyers become fearful again, and supply can rise when people see that the market has turned, and they rush to sell before it slides further. If the supply / demand balance is less favorable, they a shortage of buyers, and increasing supply would drive the market lower, even if banks maintain their current lending policies. But i do agree with you that banks will likely become more restrictive than they have been in recent months, where they have begun to return to some of their reckless policies of 2007. I think of the next move down in prices will seem like a "rug pull", when people discover what they thought would be the floor (the lows of early this year) gets taken out, and price start sliding towards lower lows. The most scary event might be a perfect storm of several negatives, all in the first half of 2010. We could easily see : + Continuing job losses and falling incomes, + Interest rates shoting up again, and + The rug-get-pulled on bullish sentiment (with prices sliding to fresh lows). I think 2010 will be a bleak year for UK property, and if you want to sell, now may be a great time to do so. / more: http://www.singingpig.co.uk/forums/ShowThr...D=912723#912697

I understand that sentiment. And that is exactly what must be eradicated before the downturn can end. So long as those hopes are still alive within most people, we will not see an important low in the market. The attitude has been / is being severely eroded in the US, and people are now understanding that it may only make sense to Buy, when it is cheaper than renting, because otherwise, why take on all the risks (a huge mortgage is only one of them) and hidden expenses of owning. Then, and only then, people will be buying for the right reasons, and paying sensible prices. This new thinking will come to the UK in my view, but it may take another 4 years from the 2009 "second top" to get there.

Okay, Boys, here it comes ... (you may have to soon throw away your Jim Sinclair bibles - haha): THE BIG TEST FOR GOLD, the strength of its rally, may be dead ahead It looks like the US Dollar has turned up, and there may now be some selling pressure on: Stocks, Commodities (including Gold), Property Here's the DXY /US Dollar chart ... Chart : 6 months Here's the comment by one of the more Bearish analysts, who has been expecting the Turn and weakness in the Dollar since the beginning of October: BAM / on Twitter: INVESTORS-US Dollar Index melt-up has started and we're positioned to profit from the coming stock market crash. We remain in BMP positions about 10 hours ago from web Here's what Yelnick has to say: Dollar May Have Bottomed - Let the Melt-up Begin! ...A bottom in the Dollar signals a top in everything else Major bottoms or tops are often not coincident but sloppy, so it does not necessitate all markets turning together. Indeed, that would be unusual; but we are in unusual times, once-in-a-lifetime times of the deflationary depression that follows a huge credit bubble. We had them in 1929, 1873 and 1837, and although many have read about the Great Crash in 1929, few remain who really experienced it. The rules-of-thimb in the investing world have really grown out of the experiences post WWII, indeed post the 1949 end to the trading range of the Great Depression and the beginnings of great bull runs of 1950-66 and 1982-00 that mark the American Century. We have been in a rare Currency Market since 2002, a market driven primarily by the Greenspan Indian Summer of reflation to stave off the deflation of Kondratieff WInter (which he explicitly acknowledged in a paean to Kondratieff). The reflation policy of the Greenspan Put has been continued by "Helicopter" Ben Bernanke. Hence, we should see almost all markets turn on the Dollar. This means lighten up on gold, get out of oil (quickly, it is a volatile market), back off those Carry Trade perennials like the AUD and Loonie, and get out of equities. Bonds may be on a spike to higher rates, which is bearish; more on that as it unfolds. If we are truly in a return of risk aversion, after the spike Treasuries should rise (and rates fall) as money rushes there in the vacuum of a fall in everything else. A Dollar Bottom also signifies an over-turning of the assumptions that have fueled the Obama Hope Rally, and a return to risk aversion after a summer of hope. Watch the DX closely. Until it bifurcates above the wedge trendline, it could be a false break. The sharpness of today's move suggests a short squeeze is on, against those who have been betting on the Dollar going excessively lower. /more: http://yelnick.typepad.com/yelnick/2009/10...ltup-begin.html

As posted on the HPC Merryn & Affordability thread The usual downturn is 3-5 years after the peak. But this one could be 5-6 years because of the error in money policy which has created the current strong Dead Cat Bounce, and it will be "as if" the downturn is restarting from a second peak in 2009. Many now see a need to regulate lending, and enforce LTV maximums, and Price-to-Income measures. This may help to bring down the market. But the real problem is the artificial level of interest rates, which will not last as long as CEBR expects. (Low rates until 2014 is a complete joke, don't these guys understand what that would do to Sterling - $0.75? $0.50?) Also, banks are not the sole driver of property price levels. Not everyone is a "knee-jerk idiot" who will buy just because some misguided bank will lend them the money. In fact, I think the losses that people are going to suffer in the next 2-3 years will greatly reduce the population of Knee-Jerks in the UK, and buyers themselves will begin to regulate what they will pay for properties, and 3-3.5x income may again be seen to be the limit of a sensible price. Presently, the very low interest rates - lowest in Britain's future - have distorted people's thinking about what is a sensible price to pay for housing. The UK moentary authorities have miscalculated. The boom they have engineered is just storing up problems, and will help to create a bigger property crash down the road, when rates rise. Sterling may be the Achilles Heal in this story. People are fleeing the currency because of the low rates, and continued weakness will bring higher inflation and a need to raise rates. This may happen far sooner than the current (complacent) consensus expects.

Sure. And the bears might be wrong too, which is enough reason, if you can afford it. As you said earlier, Enough is enough, and if you can afford it, and really want it, go ahead. But be prepared to see the value tumble. If you dont really care about that because the money is trivial, then definitely go ahead if you like it. Personally, I might look for a place that I like (to rent), and try to sign an 18 month, or 24 month lease. I have heard of such things. I believe Financial Planner did that

Are you winding us up: "We might buy soon... don't understand how most people buy" Surely, you can hold off a few months, and see if we get a renewed slide before the end of Q1! I think prices may be AT LEAST 20-30% lower by year-end 2011. Isnt that worth waiting for?

yelnick on neely and zoran... Michael, yes, if this is indeed a major Interim top then all major indexes should act in kind, although maybe not in concert (ie at the same time). What will be interesting is whether the blow out Amazon earnings will matter tomorrow. AAPL didn't, nor did the EBAY bust. The Wilshire in particular should be very much like the S&P (the two broad indexes). The Naz and the R2K might vary the most. As to trading, if you are long, probably best to ride it out for the moment. If short, be a little anxious before jumping deeper into the river. Based on Elliott wave, best plan now is stand aside until a break of the 0-X trendline (running Sp1048 tomorrow then 1050 next Mon. I mentioned Zoran in the prior post. He was taking Neely and simplifying when he died. Neely's work is quite amazing in its ever-growing complexity, but inside of that complexity lie some pretty clear rules. A lot can be summarized with the concept of Bifurcation out of a trading range, which is usually not horizontal but captured within a channel. This market since Mar has twice spiked fast then slowed into a channel. The spike is the Thrust that is tradeable and the channel is the Plateau which is not. We broke out of the first channel in Jun, then spiked up; now we remain in a second channel. A break below that channel of a steeper slope than the channel itself (think reflecting the angle from up to down) is a Bifurcation. Until then, this could continue to subdivide up. One of the great benefits of Zoran's view is that one need not have a wave count or prediction at all times; just wait for the high probability calls which come with Bifurcations. Zoran was also attempting to project those Bifurcations using Fib and Lucas relationships between Bifurcations. Posted by: Yelnick | Thursday, October 22, 2009 at 10:32 PM /see: http://yelnick.typepad.com/yelnick/2009/10...d.html#comments

I have DRAWN IN SOME CYCLICAL INDICATORS on GF's Property-in-Silver Chart If the trendline has any meaning, we may see a bounce from here (as Silver falls?)

I have DRAWN IN SOME CYCLICAL INDICATORS on GF's Property-in-Silver Chart If the trendline has any meaning, we may see a bounce from here (as Silver falls?)

Just be patient. Amongst the many BTL collectors will be many forced sellers within 2-3 years Sensible chap ! Some people think I am mad to be a seller now. But it sure felt good to go into the bank today, and payoff our biggest remaining mortgage with the proceeds of our two last flat sales. It will be great to see the rental income rolling in, with no mortgage payments rolling out

Okay. But there are more than 900 houses in the Uk. And the ultimate effect may be that prices of house in his area will be relatively depressed over the 2-4 years he is selling down