For remaining short-term bearish on gold and silver. The mail continues to pour in! Hundreds, if not thousands of readers want my head? yet again?

I have never, and I mean NEVER, seen such an outpouring of emotions!

But truth be told, the level of emotions that are now running so high against anyone who dares to say that gold, silver, other metals, and commodities should fall in the short term is one large reason precisely why they probably will decline.

For one thing, bullish sentiment in the precious metals is still too high. That means those who have already bought have largely bought. And those who haven’t can only see one direction for the precious metals, UP.

That alone is a negative for the precious metals. When the majority expect a market to go in a particular direction, they are almost always wrong. That’s the ironic nature of crowd psychology and behavior.

For another, when any decent selling does hit gold and silver, when something frightens the herd, guess what will happen?

It will turn on a dime, start selling en masse, leading to a sharp decline.

Don’t get me wrong. As I’ve said many times, I am very, very bullish on the precious metals on a long-term basis. Ditto for most commodities.

But the only way commodities in general are going to fulfill their long-term price targets is if they wring out some of the short-term excess that has flooded these markets. And they clean out all the weak longs and the majority of bulls.

By doing that, new energy, new buyers can come back into the markets and take them much higher.

Readers Ask and

I Answer

With emotions running so high, and with so many events and fundamental forces arguing for higher prices, I know all of this is very hard to understand and grasp.

So today, I’m going to publish some recent emails I’ve received and my replies. Let’s get started …

One reader writes in: “Larry, you’re bearish gold and silver in the midst of the Cyprus event? Have you lost your mind?”

My reply: No, I haven’t lost my mind. Quite the contrary, it seems like the majority of investors have.

The most telling action is always to be found in the markets themselves. Given all the massive money-printing going on in the world now and the confiscation of depositor money in Cyprus, setting a precedent for the Troika in Europe to use that tactic in other situations, you’d think gold should already be at record new highs! But it’s not!

Instead, gold hardly reacted to the upside on the Cyprus news and silver actually declined. Why?

Because most investors just want cash right now. Period.

Look, I love gold just as much as anyone does. It is a great long-term store of value.

But I can’t go to the gas station and fill up my tank and pay for it in gold. I can’t pay for my haircut in gold. I can’t go grocery shopping and pay in gold. I can’t buy diapers for my two-year old son with gold.

Nor can I invest too much money in gold because it doesn’t pay me one red cent of interest.

So right now, investors of all sizes are opting more for cash than just about anything else. By default that is pushing the U.S. dollar higher. That is bearish for the precious metals.

Another reader writes in: “When the heck are you going to give your buy signal for gold, Larry?”

My answer: When one of two things happens …

A. Gold falls to $1,384 by August, or …

B. Gold rallies and closes above $1,760 on a Friday-closing basis.

Those are the latest signals on my models. In between $1,384 and $1,760 gold is in a neutral trading range. And as long as gold remains under $1,655.80, the bias will be to the downside and a test of $1,384 remains a high probability.

So you see, gold can bounce up to the $1,656 level and it still remains bearish short-term. Moreover, it would have to rally a full $160 to enter a new bull leg to the upside.

Now, I can hear even more questions: “If gold were to rally and close above $1,760 you will turn bullish, yet you will have missed a huge move!”

My reply: Then so be it. I don’t really care. What matters is buying when it’s safe to buy. And given that gold long-term is heading to more than $5,000 an ounce, I’m not concerned if I miss a $160 move to make sure I’m buying a confirmed bull market and not some giant bear market rally.

Another reader writes in: “You seem more bullish on equities and real estate than on gold or silver or any other commodity for that matter. What gives?!”

My reply: You are correct! I am more bullish on U.S. equity markets and real estate than I am on commodities right now. The reasons are simple …

First, on an inflation-adjusted basis, U.S. equities and real estate prices are cheap.

Second, on an international basis, U.S. equities and real estate prices are cheap.

Third, from an income perspective, U.S. equities and real estate can provide far more income than precious metals, which offer no income.

Fourth, due to Cyprus, we are entering a new period of insecurity in the monetary system. Cyprus has proven that European authorities and the Troika will confiscate bank depositors’ money.

It was the absolute worst decision that could have been made. Now, investors everywhere, small and large, are going to be highly suspicious of bank deposits.

And although I do not think it will ever happen, investors are now starting to also worry that their gold and silver can be confiscated.

So then, what do you do with your money? This is what’s going to happen …

Investors are going to start looking at equities not just for the potential income they spin off, but also because they believe governments will not move to confiscate your share holdings. That would be outright nationalization of companies. And it’s not likely to happen in the West, in Europe or the United States.

After all, can you imagine Europe or Washington saying they’re going to take away your shares in Dow Chemical, or Microsoft, or Apple or Johnson & Johnson, or McDonald’s?

Or Sanofi-Aventis, or Siemens, or Vodafone or Nestlé?

If they even tried, there would be a mass exodus of companies from Europe or the United States, sending them scurrying for new corporate homes, most likely in Asia.

Next on the list is real estate. Though certainly not as liquid as stocks or even precious metals, real estate is now also going to become a safe haven for capital.

Hundreds of billions of dollars are now going to leave Europe in droves and head for our shores, buying up real estate like crazy. And to Asia.

It will be very bullish for property prices. And it will be driven by geo-political concerns and fears of money confiscation in Europe and nothing else.

In short, and I urge you to commit this to your memory: Real estate and stocks are becoming the alternatives to bank deposits.

They offer income, a return on investment, and safety from confiscation.

Later, when the sovereign debt crisis fully infects Washington ? and the dollar resumes its long-term bear market ? you will be able to place gold and silver back into the mix of investments that investors will actively seek out.

But the crisis is not hitting Washington in full just yet. So yes, I do expect real estate and U.S. equities to outperform gold and silver in the intermediate-term.

Again, I know these are difficult concepts to understand, and completely unconventional. But if you are to financially survive what is happening, you cannot think conventionally.

You must question everything, and you must do so from many perspectives, putting yourself in the shoes of a European, an Asian, a corporate treasurer, and more.

If you do that, you will see the real forces at work today and you will not be blind-sided by what’s happening.

Further, you will realize that most advice you get is just plain brain dead, because it comes from analysts who can’t see past their own noses, who can’t think internationally and unconventionally.

Best wishes, as always …

Larry

Swing Trading Daily

Investors have been wisely diversifying their portfolios to provide exposure to more than just U.S. stocks. Whether it’s emerging markets, real estate or gold bullion, a broad-based approach provides for a better night’s sleep.

Yet it’s fair to ask: Do commodities also have a place in your portfolio? After all, they seem to rise and fall with alacrity, and investors often only notice them after they’ve made sharp gains or plunges. Truth is, we have no crystal ball that tells us how this group will fare in 2013. We can look at the supply and demand backdrop for various commodities, but much hinges on the health of global economies.

…..read more and identify those commodity stocks that are yielding up to 10% HERE

There’s an offshore “gold rush” happening right in front of our eyes.

In fact, if you add up all the bullion that’s been added to central banks over the past two years, the total pales in comparison to this offshore prize. We’re talking hundreds of billions of dollars here.

And my friend, it’s just the beginning — over the long run, we’re talking trillions!

Today I want to give you an inside look at this offshore “gold rush” – along with the best ways to play it. As you’ll see, the normal mining cast and crew — Barrick, Goldcorp, Kinross — aren’t the winners in this game.

Before we continue, though, allow me to come clean that I’m not talking about precious metal plays at all. Instead, I want to share with you what our intrepid in-house geologist Byron King calls an offshore “gold rush”… of oil.

Indeed, the hunt for the world’s next big black-gold treasure is on. Only in the next 12 months, the hunt for massive oil paydays is heading out to sea — in a big way.

“Fortunes will be made,” Byron says. And the way I see it, those fortunes are going to come sooner than most people think — starting right now in 2013.

Over the past few months, momentum for the offshore oil industry has been gaining. Spending on subsea equipment is expected to grow to a record $13.9 billion this year — a 66% jump from last year’s total, Quest Offshore Resources reports.

You and I both know that you don’t throw $14 billion/yr onto a wall and hope it sticks (heh, unless you’re Ben Bernanke or Tim Geithner). In other words, there’s a lot of smart money betting that the offshore oil industry is about to boom — this year… right friggin’ now!

2013: The Year of the Offshore Gold Rush!

This year is a standout – an anomaly – and mark my words, now’s the time to cash in on this offshore rush.

In fact, the whole scenario is playing out just as we’ve predicted…

First, let’s back up. In recent years, I’ve written about America’s (onshore) energy renaissance. In the most unexpected of events, America is bustling with oil and gas development. And where most analysts believed that we’d be importing stuff like natural gas and oil — we’re actually on track to EXPORT natural gas and higher volumes of petroleum products.

Ah, how the times have changed! America is getting a fortuitous boost at a time when it needs it most. Oil and gas wells are flowing, pipelines and railroad terminals are bustling and raw wealth is flowing from underneath American soil. (The same wealth explosion can’t be felt in locales like Europe or China, that’s for sure.)

Here’s the kicker…

As this unexpected boom evolved and money began to fill the coffers of the big oil companies involved — Exxon, Chevron, Statoil, Marathon, Hess, Shell and more! — a lot of that money went right back into exploration and development budgets.

More and more of that money is flowing directly into global offshore development.

You’ve got to understand that the U.S. has “more” oil and gas than it ever expected, but when you put our domestic shale boom in perspective of the global oil scene, you’ll realize that the boost in supply is peanuts (around 1% of global output).

That’s exactly why big oil companies are making big bets offshore — they’re digging for black gold in the world’s deep-water basins!

“Just five years ago, we didn’t have the technology to find oil or even gain access that deep,” Byron King tells us. “Now we do. And suddenly, a few bold explorers are coming across huge, untapped resources.”

So while the U.S. enjoys a solid boost from onshore oil and gas development, this year’s big play in the energy market is offshore. Here’s a full excerpt from Byron:

“No Longer Just Trackless, Wave-Tossed Ocean

“Today, deep water is a key focus of the international majors. The energy industry has new geological models and better geophysical technology and data. There have been vast improvements in signal processing and data crunching. And we are living through a time of absolutely revolutionary advances in drilling capability. What used to be just trackless, wave-tossed ocean is now prime oil patch real estate. It follows that today we are seeing phenomenal success rates for exploration with super-high-output wells.

“Some of the world’s most significant new discoveries are coming from deep water, such as offshore Brazil. You probably heard about the 8 billion-barrel Tupi field that Petrobras found last year offshore Brazil. That’s only scratching the surface. Almost every month or so, you see another report of remarkable new finds in the deep waters offshore Brazil. The reports come from the Brazilian state-owned company Petrobras, as well as from the likes of giant Exxon Mobil and major independents like Hess.

“But the deep-water energy provinces are not restricted to Brazil. You also see significant investment in the Gulf of Mexico, off West Africa, in the Mediterranean, in the North Sea and in the Asia-Pacific region, and eventually, you’ll see it in the Arctic.

“And it’s big oil! Close to home, some of the newest deep-water fields in the Gulf of Mexico are scheduled to produce nearly 250,000 barrels of oil per day when they reach peak output. It’s safe to say that there’s much, much more coming from the deep water of the world.”

To put Byron’s comments in perspective, think of it this way…

The Bakken oil formation in North Dakota — one of the great shale oil plays in America — will have “good” wells that produce 500 barrels of oil per day. Sure, that’s a lot of unexpected oil for the U.S., but compared with hundreds of thousands of barrels per day from an oil-rich offshore field, it’s like comparing a swimming pool to one of the Great Lakes.

The big oil players know that the real windfall opportunities lay hundreds of miles offshore.

Heck, just this week we saw news from Chevron. The company’s latest oil strike in the Gulf of Mexico sits 190 miles off the coast of Louisiana in 6,000 feet of water. But they’re keeping the exploration numbers close to the hip — and still running full steam ahead.

Also, this week, the French oil giant Total announced it is, essentially, looking for all hands on deck — seeking to hire drilling supervisors with any deep-water experience. Total has an “ambitious” deep-water exploration program commencing over the next five years, according to their deputy vice president of drilling.

Indeed, this whole global play is just coming together now.

“Big Oil” Isn’t the Only Way to Play This Rush

To be sure, it’s not just Big Oil that’ll be cashing in from this trend. Sure, we’ll see a nice bump in share price for each exploration well that pays off for Exxon, Chevron or Hess — but some of the higher gains will come from other offshore players.

The “picks and shovels,” or in this case the “pipes and valves,” will certainly do well.

After all, working on a drill plan 6,000-10,000 feet below the surface involves a lot of hi-tech precision. In this arena, as Byron King’s readers know well, you can look at companies like FMC Technologies (FTI), Cameron International (CAM) or Oceaneering International (OII).

These companies are to the offshore industry what NASA was to the space program. When Big Oil needs a part that “has to work” in the harsh underwater environment, they pick up the phone and call the names above — and later down the road, they cut ’em a big check.

Do you need a valve that can work at 10,000 feet? How about a safety shut-off system that can’t fail? Or in the case of a needed fix, how about an underwater ROV (remotely operated vehicle)?

These “pipe and valve” plays are the go-to guys for these types of underwater technologies, and in the coming years, look for a solid tail wind for their shares.

In the meantime, keep an eye to the sea. This year will prove to be the liftoff point for increased offshore activity — and the investment opportunities that follow!

Keep your boots muddy,

Matt Insley
for The Daily Reckoning

Matt Insley

The Managing Editor of the Daily Resource Hunter, Matt is the Agora Financial in-house specialist on commodities and natural resources.  He holds a degree from the University of Maryland with a double major in Business and Environmental Economics.  Although always familiar with the financial markets, his main area of expertise stems from his background in the Agricultural and Natural Resources (AGNR) department.  Over the past years he’s stayed well ahead of the curve with forward thinking ideas in both resource stocks and hard commodities. Insley’s commentary has been featured by MarketWatch.

Special Report: Forget QE3 – America’s Going Bust, on the Road to Bankrupt Hell- If America had a credit card, it would get mercilessly cut up and thrown back in her face. The country’s basically broke and isn’t paying its debts. Harsh, but true. All of that – and how it could affect your family and your retirement – is revealed in this urgent video report. Don’t wait, watch now.

View articles by Matt Insley

In an earlier post I pulled the old HUI 888 skeleton out of my closet. 888 (AKA the 3 Snowmen) was a target measurement based on how the chart looked in 2010. It can be liberating to take your worst call and publicize it for the world to see. They tell me that you sell a lot of newsletters that way too . All market geniuses should try it once in a while.

Kidding aside, it can be a lesson in learning from mistakes. Can this chart tell us anything of value today?

….4 more charts & conclusion HERE

There are two trends in the Canadian energy patch in the last three weeks that have been making money for investors — but the question is, do they have legs? Can the uptrends continue?

The first and most obvious is natural gas. After doubling in price between April 2012 and November, it dipped down to $3.20/mcf (thousand cubic feet) in early winter. The winter just wasn’t as cold as normal… though colder than last year.

(weekly chart via Stockcharts)

But fast forward to March 2013 and colder weather has gripped much of the high population areas of the U.S. east coast and the Chicago area. U.S. natural gas storage levels reflect this chill: overall U.S. storage levels are now below 2 tcf, and the year-over-year deficit is 440 bcf.

As a result, gas jumped back up to over $4/mcf, and has taken the chart of many natural gas producers with it. The futures strip shows the market anticipates gas prices above $4.00 from July forward.

Can it last? The pros I talk to in Calgary dismiss this bump, saying shoulder season is coming in April/May and the North American gas price, along with all the good looking Canadian stock charts it has created, will droop then.

The Canadian arm of brokerage firm Raymond James has a slightly more bullish interpretation:

…..read more HERE