Ultimate bond and stock market bubbles?

It may be the ultimate bond bubble where the central banks and nations become the main speculators (think South Sea or Mississippi bubbles).

It may be the ultimate stock market bubble where the companies themselves buy much of their public traded stock and they are the willing recipients of massive distribution.

Can someone please tell me why gold is not in a secular bear market?

21 December 21, 2015 at 9:28 pm GMT:

I really would like any gold market analyst to lay it on the line and tell us why they think that gold is not in a SECULAR bear market, giving us good reasoned arguments for the continuation of a secular bull market, whether technical or fundamental.

I see the current chart pattern as kind of midway between the secular bear market of 1980-1999 and perhaps the cyclical bear in 1974-1976. There seem to be some features from both in the current price action in gold. The timing of this bear market is about the same as for an entire 7-8 year dollar bull market cycle on its historical chart, though gold overshot to the upside when the dollar had already bottomed between 2008-2011.

So gold could have a great upmove on the next USD down cycle perhaps from 2016-2024. That would be nearly a perfect fit. It would also make the entire last 25 years of price action (1999-2024) a gradual version of the 1971-1980 bull market but this time fitting better to the 7-8 year dollar up and down moves.

The sticking point for me is if we have real deflation and real trouble in the EU and Japan and other countries leading to a secular trend change in the US dollar index to the upside, cancelling out its last 30-45 years of devaluations.

Here was some of my other reasoning from another post:

I still can’t make up my mind whether gold is in a cyclical or secular bear market. Oil and platinum for instance obviously have been in secular bear markets since 2008. Gold was late to turn in 2011.

I keep looking at the 2011 top in gold versus the 1980 top and the 2011 top was not so extreme. However, there was less inflation in 2011 than 1980 so inflation adjusted the difference between the two bull moves are smaller than the nominal price values suggest. Gold has been a more liquid market in this bull run with more nations participating, more paper products, more leveraged products and more mine supply than in 1980. So one would not expect a secular bull market top to be so extreme. In the same way, a Dow bubble top now would not be expected to be as extreme as in 1929.

I we look at the current gold bear market, the correction has been less extreme than in the 1980s and for silver this is even more true (silver was down about 90% from 1980 to 1982 alone). However, again, the increased liquidity and diversity of these markets might account for this and not be an excuse to think that we are not in a secular bear market for both, especially if other commodities are in secular bears already.

Eventually there will to be a US dollar bear market cycle and I wonder how it can take the dollar to new lows and gold to new highs considering the mess in the Eurozone and Japan and their increasing monetary debasement. In that case can we expect a dollar down move from 2016-2024 perhaps to produce new highs in gold? I wonder.” 

Originally posted on The Korelin Economics Report daily show here:

http://www.kereport.com/2015/12/21/docs-comments-gold-oil-stock-markets/

Answers on a postcard please either at the above link or at this one:
http://goldtadise.com/?p=358311

Bounce in gold - is it now over? Monday 2015-12-07 19:41 GMT

Is the dead cat bounce in gold now over? A bounce that fails to get to a round figure (this time $1100) would be typical of most of the price action over the past 2.5 years.

Further to this, the upmove at the end of last week failed to bring gold back over 1000 Euros. So Euro gold is back in 3 figures again. Kitco has it at 991.78 EUR (-5.50 EUR on the day).

In Sterling, gold bounced at about 700 GBP, breaching below 700 on the last swoon but now at 713.81 GBP (-5.37 GBP on the day). 700 GBP is a key level that has been tested in the last couple of years and breached only very temporarily.

Last Friday was a big up day for gold in all currencies quoted on Kitco but still it is under 1100 USD, under 1000 EUR and I think there is danger to go back under 700 GBP, perhaps for a sustained period of time as gold is already flirting with thee figures in USD terms.

'Three peaks and a domed house' patterns revisited in gold and silver.

Here they are. These are 3 peaks and a house patterns revisited in gold and silver from August 2011.

The target on silver was $12.44 and on gold it was $1155. As you can see, silver had already made its top near $50 at point Z and was on its way down into the $30-40 range when I annotated the chart. Now it is $14:



Gold has of course already exceeded its $1155 target to the downside as of the end of 2014 and is now at $1060 as of late 2015. Again, this chart was made in August 2011. The breakout happened much later in gold and was much shorter in duration. It was only another month or less to the gold top price of $1920 when this chart was drawn:

Re-visiting old chart with gold target of $780.

I never posted my gold bear market chart with the $780 target, so here it is. I cannot update this because I no longer use this particular charting service.

I regarded the $730 high in 2006, the $1030 high in 2008 and especially the $680 low in late 2008 as key points to try to draw median lines of some kind. I noticed a pattern where the impulsive move up to $1920 is a larger version of the impulsive move to $1030 from 2008. On the score there is a possible target of $780 for gold, depending on the time-frame since the target line is sloping.

My estimate for this low was perhaps in 2015 and here we are. This chart was drawn in early 2014:

Breakout from long term US dollar bear market since 1971?

I have asked Rick Ackerman on www.kereport.com blog what he thinks about the possible reversal of the generational downtrend in the US dollar.

For 45 years, we have had typical US dollar bull and bear market cycles:

8 years down 1971-1979

6 years up 1979-1985

7 years down 1985-1992

9 years up 1992-2001

7 years down 2001-2008

9 years up? 2008-2017?

That is about an average 8 year bull and bear cycle.

In this interview,

http://www.kereport.com/2015/11/11/rick-strong-dollar-120-index-long-term/

It sounds like Rick is forecasting that the last 45 years action in the US dollar with lower lows in every cycle is not going to be followed and the normal cycle is going to break.

In that case, it seems that it might be more likely to break to the upside if he says the up-cycle will continue for another 5 years, that gives a dollar top in 2020 and a 12 year bull market in the dollar!

The reason for this could be that we are in a once in a century deflation event like the one in the 1930s. So perhaps we shouldn't expect the dollar index to behave as it has in the past 45 years because they are irrelevant to the current events

This has all kinds of implications:

One might be that the dollar could have turned up into a secular generational bull market in a break from the past 45 years of its making lower lows.

It also would imply secular bear market in the Euro contrary to European currency strength versus the USD in recent decades. Perhaps it would go hand in hand with disintegration of the Euro and the European Union whose integration was coincident with its generational bull market ending in 2008.

It could also imply deflation and a long period of it, not atypical in a credit contraction after an exceptional financial bubble.

That might put an end also to the commodities cycles that tend to run inverse to the US dollar, so perhaps the commodities bear market has further to run and looking at recent lows like the 2008 lows or 2001 lows in commodities as a guide is irrelevant.

It might also imply that there will be no continuation of a secular gold bull market perhaps for many years but perhaps some kind of trading range at relatively subdued levels for many years.

Some useful links for long term charts.

Some useful links for long term charts:

5 year:
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=5&mn=0&dy=0&id=p94671520978

Start date in 2000:
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=M&st=2000-04-04&en=today&id=p02097917506&a=312811263

35 year gold:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&yr=35&mn=0&dy=0&id=p84715185119&a=422997387&listNum=1

35 years Nikkei
http://stockcharts.com/h-sc/ui?s=$nikk&p=M&yr=35&mn=0&dy=0&id=p84715185119&a=422997387&listNum=1