Financial Sense Blog

I've noted before that at intermediate turning points we will usually see breadth diverge from price.

As illustrated below, each of these three economic indicators are reported in the media headlines in the aggregate, that is, their sum. Because the first two were better – up and improved, respectively – compared to the month before, the financial media, and especially permabull TV talking heads, claim they are bullish indicators for the stock market, but none is: all three are bearish for the stock market as we demonstrate here.

Good morning. With speculation running rampant about what he might or might not say regarding QE2, the state of the economy, inflation, and most importantly, the sudden spike in bond yields, Ben Bernanke decided to take a page out of his predecessor's book and said very little. Instead of addressing the improvement in the economic data or the defiant behavior of bond yields, Gentle Ben stuck to the script and will likely have the Fed just keep on keepin' on in terms of buying bonds.

In 2008, America suffered a massive economic heart attack. Its doctors, thought to be the world’s best, believed the US to be in good health, having recovered from a similar though smaller crisis in 2000.

We received dozens of responses – 63 pages worth – to our November 11 invitation for ideas on how the bull market in gold will eventually come to an end.

Gold war update from the front lines: The Gold Community retook $1400 last night. Silver is close to retaking $30. I won the battle as to whether gold would take out $1424 on the upside or $1315 on the downside. Most thought $1315 would fall.It didn`t. Gold soared to $1430 basis dec futures and many gold stocks continue to exhibit violent upsurges.

In August, Federal Reserve (Fed) Chairman Bernanke stated inflation was too low; in October, the Fed's Minutes lamented that the market appeared not to take Bernanke's August statements seriously enough. In our assessment, today's Fed statement of the Fed's Open Market Committee (FOMC), with an almost verbatim repetition of the previous FOMC statement, screams: "markets: trust us, we mean what we say."

Usually every Friday, the Commitment of Traders (COT) report for precious metals including gold and silver is released to the public that accounts for position data ending on the previous Tuesday. Although specific traders aren't named, the report is considered key in understanding the structure of the market. For this reason, some traders in the silver market expect increased volatility and large market declines on Tuesdays and Wednesdays - and the data supports this notion.

In the midst of any long-term trend, like the secular bull market for metals we’re in now, there will be trends within the trends. You could think of them as being like eddies, whorls, and side-channels in a great torrent. We see one such developing that could benefit junior gold stock investors in the near- to mid-term.

Over the past few weeks I have been warning about a decline is bonds and a rise in interest rates. Bernanke has decided to leave rates unchanged and remains committed to the plan to buy $600 billion dollars of long term debt. Congress and President Obama are working together to extend the Bush tax cuts for two years at a cost of $858 billion.