Truly an awful time for gold and silver investors right now. Mining stocks are in one of the worst bear markets in history. E.g. compare five-year charts of the NASDAQ crash to mining stocks below. The terrible irony is that I'm sure many people sold common equities and bought mining stocks after the financial crisis to protect themselves from the Wall Street circus ringleaders. Little did they know that they would transfer up to 90% of their wealth over to them in the next 5 years. And that doesn't even touch upon the opportunity cost of pulling out of stocks, which haven't done too badly.
Again, I don't have too much time for extensive commentary -- but luckily most of the charts I've commented on in the past several posts are still current and performing quite well ...
Watch for the 38% Fib line on the CCI
Still waiting for the green flanging wedge to be hit on the "10-yr treasury yields measured in silver" chart, below, which should mark a cyclical change in the gold market. The basis for my confidence in this prediction, made over a year and a half ago, is that this chart reflects the cost of government borrowing based on a real good (i.e. silver, which has both monetary and industrial value), and that cost has to trend downwards. But, since nothing goes straight down, this cost has shown periodically violent "relief" reversals, that appear to be getting more violent and lasting longer before a continuation of the trend.
Unfortunately, while gold&silver had a worse month relative to equities than it did even in April 2013, yields also fell, so the chart below didn't improve much...
Here's a remarkable monthly chart (NASDAQ vs 10-yr yield) I presented recently, predicting it would have a three-line break reversal. It just did. A textbook bubble is no match for the Fed. I am watching to see if this ratio can finish November up another percent (actually less than that), which would rule out a double top, and probably signify a longer equity bull cycle.
2014 target hit in sliver. I won't short anymore until I have time to draw new lines in the sand. I would be surprised if the green band is broken to the downside, but not shocked, as I wouldn't rule out $12 based on other charts.
I told y'all this line was important. . . when long term trend lines like these are broken, even if they quickly recover, the other shoe almost always drops, in my opinion.
Here's the gold vs S&P chart I mentioned above. We're well into my target
I presented these two charts not too long ago as gauges for when to go long stocks, and they were on the money. [added 11/5: sorry, I removed the legend from these charts to avoid clutter, but the moving average on the top, monthly, chart are 21-34 months, i believe (fibonacci), and the one below is based on 20-day EMA envelopes]
And the old standbys
One final note before I leave you for the week ... I hate to pile on here, but I got wind of some positivity amidst the gloom that the Swiss gold referendum may pass. Bollocks. It will not pass. Or more precisely, it will only be allowed to pass if gold will not rise when it does. Gold bugs can be so naive, sometimes.