I have warned that Illinois is on the brink of bankruptcy. Now, Illinois Comptroller Leslie Geissler Munger says she will delay monthly paychecks for lawmakers and statewide officials since there isn’t enough money to pay the state’s bills and other services should come first. This is really interesting. What will happen next when the politicians cannot get paid?
We are in one of the most dangerous periods in many markets from metals and stocks to currencies and bonds. Many people end up buying highs and selling lows because they trade emotionally. They assume if something rallies one day that the trend has changed. If you want to survive your own trading decisions, you have to trade dispassionately. Assuming a market will continue in the immediate direction is what leads to losses and all the studies show that the vast majority of people do not make money — they lose money.
This is the whole purpose of creating a defined model to take the emotions out of the decision process. Achieve that, and you will see your profits rise. You have to learn to survive your own trading decisions.
At this year’s WEC we will have a day of workshops and a technical analysis course day.
QUESTION: Mr. Armstrong; You have stood up against the bankers for their manipulations when nobody else would do so and paid the price that these people who hate you never acknowledge. They even made a movie about you for standing up to these bankers yet these goldbugs do hate you for exposing their rantings. If they were not wrong, they would not be against you since you have even shown how you project $5,000 gold in the years ahead using real analysis not guessing. It is always kill the messenger. To me this reflects their lack of honesty. My question is simple. Who is the bigger manipulator, the banks or government? Since Hillary’s lack of trust is at 57% and Trump is around 60%, I suspect it is government. But I will defer to you.
Thank you for looking after us
JD
ANSWER: In my “opinion”, there is no question that government is the master manipulator. This is what Marxism and Keynesianism is all about — how to manipulate society to maintain political power. This is also coming to an end. The central banks have manipulated themselves into an impossible position from which there is no escape. This is what will make the metals and stocks rally. This has nothing to do with bank manipulations, hyperinflation or fiat; this has to do with the collapse in confidence within government.
COMMENT: Mr. Armstrong, I happen to be an anti-trust lawyer. Your piece on the airlines was on point. I am also interested in the precious metals. Recently, one of the “promoters” said you did not know anything about anti-trust. That to me proved these people just say anything and lack the integrity or knowledge about what they write. They convinced me they are only promoting an agenda and that statement proves they lack credibility.
Thank you
SG
REPLY: Well, I did not read those comments and really do not care what those people have to say. I just consider the source. They have preached the metals are systemically suppressed but cannot prove such a theory and attribute supreme power to banks when Japan lost more than $1 trillion trying to support the Nikkei. Not even governments have succeeded with QE. Mixing running stops with systemic manipulation is naive so they make personal attacks on me because they cannot prove their theory. Of course they will attack me now in hopes to pushing the metals higher and confusing people so they do not have to prove their theory or explain silence during the silver manipulation to the upside. That is all indicative of their nonsense.
Price fixing is part of the anti-trust laws; it is nonsense to say otherwise. They make up lies to say that the metals are entirely suppressed by banks and would be 100 times higher if they did not exist. They always talk up a market in which they have a personal interest and that is a conflict of interest. A rally for a few days does not erase 5 years of losses for most people.
Sorry, the Federal Trade Commission expressly states:
Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. Generally, the antitrust laws require that each company establish prices and other terms on its own, without agreeing with a competitor. When consumers make choices about what products and services to buy, they expect that the price has been determined freely on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. Accordingly, price fixing is a major concern of government antitrust enforcement.
A plain agreement among competitors to fix prices is almost always illegal, whether prices are fixed at a minimum, maximum, or within some range.
An encouraging session for Asia overnight but especially the Nikkei. Bouncing from yesterdays lows with an enticing 600 point (3.7%) rally. We did not see that response from either the Shanghai or Hang Seng but positive sessions for both is acceptable for any day. The JPY remains a focal point between dealers as all are looking for clues ahead of the next potential move. For the past three weeks the JPY has bounced off of the Reversals so will be extremely interesting to watch Fridays close.
In Europe the ZEW (Economic sentiment) was the stimulus that many markets were hoping for. With a previous release of 4.3 the 11.2 was a pure tonic following gains already seen in Asia. The DAX was the star performer closing up over 230 points (2.3%), which was way over the 1% gains by CAC, FTSE and IBEX. Energy and Mining stocks were the main components that led the way today but given the 2%+ in Gold, Silver, Oil etc. it really should be no surprize. From Frankfurt we will hear from the ECB meeting and their views on the Easing progress and maybe about peripheral bond activity. Interestingly, ahead of that we will see the Bundesbank tap their 10yr Bund issue.
The US has been a little more sedate compared to the euphoria seen in Europe today. The DOW opened strong but mid-morning had lost momentum and traded back into negative territory. Data played its part as a less than convincing Housing numbers hit sentiment. Recovery was seen by the close but it certainly felt like doubts were creeping in as we approach old highs. The NASDAQ did not manage positive territory all day but given the recent Tech results and forecasts that also is no surprise.
Precious Metals were core focus for many as the USD continues to drift lower. Gold rallied 1.6%, Silver, Platinum and Copper were all over 2.5%. Interesting that many dealers quoted the Yuan Gold contract having an impact on both (the USD and Gold) in todays pricing. We commented last week on the effect this will have on the price of Gold (April 14th).
Fixed-Income markets did very little in the US today with minor volatility seen across the curve. 2/10’s closed almost unchanged at +103bp. 10uyr Bund lost only 1bp ahead of tomorrows tap, closing at 0.17%. The peripherals saw a little bit of profit-taking after such a decent run lately. Italy 10yr closed 1.40% (+5bp), Greece 8.93% (+17bp), Turkey 9.09% (-2bp) Portugal 3.10% (-1bp) and UK Gilt 1.51% (+3bp).
The market continues to press everyone up against the absurd. The Dow rallied so far above the 18100 level that it defied the logic that continues to be bearish. Likewise, if we see crude oil pressing highs and a close above the last high of 4242, then we should fill the gap up to the $45 area. Gold continues to consolidate but the key trading range remains 1266 to 1202. We need a closing outside of this range to imply the next move. We have some turning points coming in by next week and May/June remains a key target followed by August. In many cases, we need to exceed the March highs in April to raise any hope of a key rally. Nevertheless, the markets appear to be pressing everything as far as they can go without actually breaking out or breaking down.
The 2016 World Economic Conference will probably be held in Orlando. We are not planning to hold one in Europe at this time. We will not be holding an introduction, instead, we will provide a DVD of the introduction from the 2015 WEC in Berlin so we can discuss forecasting ONLY. This year, we will split the sessions between institutional and the general public because the questions are substantially different. Seating will be limited. The entire event will probably be held over four days with workshops and a technical analysis training day. This will allow us to cover all the major markets and we will be looking at gold stocks this year and blue chip stocks as well. We are nailing down the dates but it looks like the week after the elections in the States.
We will post this as soon as we have the contract signed from the hotel. We have negotiated a great room rate and it is very easy to travel to Orlando. Additionally, there will be a shuttle to Disney so those who would like to make this a family trip will be able to do so. So, nothing has been finalized as of yet. We cannot live stream the entire event. We are looking into the possibility of a live stream for one half-day workshop. Live streaming more than that does not really work. No inquiries. We are close to the final announcement.
The gold stocks are really a mixed bag. Some companies will go belly-up and others will survive. Those with big debt positions should stay far away for as interest rates rise, they will get into a lot of trouble. For now, the London Gold Mines have made a seven-month rally. We have a Monthly Bearish now at 14390 while we are trading into the 14800 area down from the high. There has been no breakout and there is major overhead resistance. Caution is now advisable. It is best to take profits and reenter only upon exceeding the April high in May on a closing basis. We need to move up beyond April in order to see an August high from which we would probably see a five-month decline thereafter into January 2017. An April high would still imply a first quarter low in 2017. Ideally, 2016 should be the final low, but that could be on a closing basis. So we need to pay attention here.
Here we have a 2011 high and a 2012 closing below the 2011 low; completely different from gold itself. Therefore, the risk of penetrating the 1999 low or creating a double bottom still exists here during 2016. It is possible that the gold stocks bottom in 2016 and we could see gold press lower into 2017 before this deflation comes to an end and interest rates start to rise when the MAJORITY begin to realize the central banks have lost all control. Then and ONLY then will everything get very interesting. (This is on the Socrates site)
This is perhaps the most bearish rally in history. The number of people yelling that the market will crash 80% to 90% is still amazing and the number of short positions remains at record highs, proving this rally is far from over. Now we approach a cluster of Weekly Bullish Reversals below the former major high of 18351.36. The three reversals providing resistance stand at 18138, 18230, and 18289. The technical resistance stands at 18580 and 18956. So even if we were to break through to new highs, we are not yet ready for lift off. We can see that the oscillators are not at record highs. Only a weekly closing above 18289 would signal new highs ahead. Breaking above 18000 shows we are pressing higher. So watch the cluster of resistance for now as we move into next week. After this rally peaks, we should then pull back and retest the Downtrend Line in purple in the mid 17500 zone. Building a base above that level will be extremely bullish for the future, but that may be asking too much just yet.
