Financial Sense Blog

It was another extremely volatile week sharp rallies followed by sharp sell offs. Fear is in no doubt controlling the market. The bulls and bears continue to battle it out. The charts below cover some important trends and market internals I pay attention to on a daily basis.

For those interested in trading our advice is still to move on technical signals in bear momentum ETFs such as “TZA” (small cap.) or “TYP” (technology). For those interested in a bullish momentum trade I would keep focused on the emerging market ETF “EDC” but this needs to break through the 24 dollar level before it will be a trading candidate in my books.

To say that the gold standard is not practicable is the same to say that honesty is not practicable, and Constitutions are made to be blithely ignored when convenient. The American Constitution, for example, mandates a metallic monetary standard for the United States in the clearest possible language.

It is un-American to be bearish on anything besides Gold and silver. Only evil, greedy speculators would bet against stocks. Only kooky people with guns and canned goods would be bullish on Gold. That would make me an un-American, evil, greedy, kooky, gun-toting, spam-eating speculative devil. As an example of the thoughts such an unstable and unfit being creates when evaluating the financial markets, please indulge me in yet another bearish scenario simulation that contradicts the "central bankstaz and governments would never let that happen" theme.

The 5% X 3 box reversal Point & Figure chart below (of the ratio of the gold price to the commodities index) – courtesy stockcharts.com – shows an amazingly consistent pattern since 2005: A strong breakout, followed by a modest consolidation, followed by a strong breakout.

I’ve been thinking about “it is.” Actually I’ve been thinking about Walter Cronkite, media “information,” unemployment, the stock markets, Korea, Gaza, the BP oil disaster, and the Obama Administration. I grew up watching the iconic Walter Cronkite deliver the evening news. It was in times of major troubles much like those of our own now.

It’s now begun. Countries are falling, in economic speak, at an increasing rate. We will see currencies fail sooner rather than later. Gold remains the ultimate currency and must be a part of everyones portfolio. We’ve had a good run in the markets for a year, but that is done. There are many ways to make money as markets fall though, but there is risk. From risk comes a great opportunity though. Quick, wise, lucky and brave traders will come out of this crisis wiser, richer and with a proud sense of self confidence that only comes from surviving times of great stress turmoil.

When gold price are slammed down in one day, as they were on Friday by more than $20 it is certain that some sort of concerted action was taken to push the price down. Fingers point at the leading U.S. banks.

The day before yesterday a perfect stranger buttonholed me in a parking lot. She began by commenting on the weather, then it turned into a soliloquy about illegal aliens, then digressed into a diatribe against Israel, then into a rant against the Jews, then into holocaust denial...

The trillions in U.S. federal debt now exceed 85% of gross domestic product – and that’s not counting unfunded liabilities. Unemployment is breaking 20% as the government used to calculate it.