Gold & Precious Metals
- This indicator says gold is about to kick off a major buying opportunity
- Simple chart pattern that holds the key to making money in metals
- Plus: The next trade triggers Thursday…
If you’re thinking about buying gold, pay close attention…
A major buying opportunity is about to ignite in everyone’s favorite precious metal.
But you won’t uncover this buy signal by visiting mines, studying gold production, or watching CNBC. In fact, I couldn’t even see it with my naked eye. I needed a sophisticated computer program to alert you to this hidden opportunity.
It was our in-house “quant” Jonas Elmerraji who spotted it thanks to the proprietary indicator he has spent the last five years coding.
And the window is about to kick off this week.
The signal Jonas has pinpointed is highly reliable. It’s made investors money almost 80% of the time over the last 12 years. His system has nailed the price action in gold this year. And that’s not the result of some hypothetical back test, either. In fact, Jonas shared his research on gold with you back in March…
Have a look at an indicator called the Kinetic Composite for GLD, the popular SPDR Gold ETF (NYSE:GLD):
You can think of the Kinetic Composite chart above as a sort of “idealized” price chart for GLD. Jonas’ algorithm crunches decades of price data and mutates it into the chart above. It shows you when a stock is predisposed to rally… up to a year in advance.
You can see how the Kinetic Composite signaled a rally at the start of the year, followed by a volatile sideways period, and then another rally kicking off this summer.
Here’s how GLD’s price has played out in the months since:
It’s been dead on, from the rally at the beginning of the year, followed by a volatile sideways stretch
Back in March, Jonas recommended staying away from gold during the unpredictable spring months when traders have no statistical edge on gold prices. That’s been a good bet. Gold has gone nowhere — and there have been a lot of opportunities to lose money during the wide swings.
Now, gold looks ready to kick off its next major K-Sign buy signal.
Here’s a quick refresher:
A K-Sign is the 100% proprietary pattern that’s formed by the simplified price line of a stock and its Kinetic Composite. It looks like this:
When you see that pattern, the one that looks like a “K” tipped on its back, it means you’re looking at an important buy signal.
Here’s where the next K-Sign triggers in gold:
This dead-simple price chart is all you need to look at to make money in gold in 2017.
It shows the next Kinetic Window in gold and the K-Sign date that kicks it off. That date is June 23 – this Friday.
Of course, you might have already known that if you read Jonas’ last gold update in these pages back in March. He told you about the June 23 K-Sign way back then.
Greg Guenthner
Rude Numbers
Every day brings another scary headline from the Middle East — which makes it easy to treat them as background noise rather than a clear and present danger. But the latest batch is reminiscent of the Balkans circa 1914, which means it may be time to tune back in. Some examples:
A US Navy jet shot down a Syrian warplane. Syria is a Russian client state, so this puts the US and Russia on opposite sides in a shooting war.
Russia warned the US that it takes the destruction of its client’s military assets seriously.It suspended the hot line Washington and Moscow have used to avoid collisions in Syrian airspace and threatened to target US aircraft.
Iran has begun launching missiles into Syria targeting ISIS. This is new in at least two ways: 1) Iran hasn’t used those particular missiles in decades, and 2) it was not previously active in Syria. This escalation from advising the Assad regime to actually killing people and blowing things up adds another player on Russia’s side against the US.
Iran and the US trade threats. US Secretary of State Rex Tillerson accused Iran of destabilizing the region and promised that the United States would support “those elements inside the Islamic Republic which would bring about peaceful government transition.” Iran called those remarks “unwise and clear meddling in Iran’s internal affairs.”
Saudi Arabia claimed to arrest members of Iran’s Revolutionary Guard who were attacking a Saudi offshore oil facility, and said that three of the attackers were being interrogated. One day later Iran accused Saudi Arabian border guards of opening fire on Iranian fishermen in the area, killing one of them.
The Saudis and Iranians are leaders of Islam’s two main factions, the Shiites and Sunnis. This makes them natural rivals, but until now they’ve mostly sparred through proxies rather than directly. Here again, the conflict is going from cold to hot.
And that’s in just the past few days. The old stuff that caused most Americans to tune out hasn’t gone away: The Syrian war continues to rage, the Saudis and their allies continue to bomb Yemen even further back into the Middle Ages, Israel continues to build new settlements in Palestine and threaten to take out Iran’s nuclear facilities, ISIS is still burning and beheading its victims on YouTube, and Turkey keeps slipping further into dictatorship.
The difference is that the major players are now bumping up against one another. All it will take is for one fighter pilot or destroyer captain to miscalculate and kill another major powers’ soldiers, and – as in World War I – these interlocking alliances might pull in everyone else. And there’s not a thing the average person can do about it.
The resulting chaos will have at least one predictable result: All pretense of fiscal and monetary discipline will go out the window in the rush to move people and machines into the theater. If you think we’re over-indebted and due for a currency crisis now, just wait.
Editor’s Note: The mainstream media says cryptocurrencies like bitcoin are only a fad. But Teeka Tiwari, the editor over at The Palm Beach Letter, shows us why “cryptos” are unstoppable.
On June 20, 2011, Forbes wrote “So, That’s the End of Bitcoin Then.”
On January 16, 2015, USA Today wrote “Bitcoin Is Headed to the ‘Ash Heap.’”
On May 5, 2017, The Daily Reckoning wrote “The Death of Bitcoin.”
Since 2011, bitcoin’s been declared dead at least 135 times.
Newsletter writers, journalists, and academics have called it a “Ponzi scheme.”
Others like the idea in theory but have doubts. They are convinced the government will shut down bitcoin and render it worthless.
If it were 2013, I would have agreed with them.
From 2009–13, bitcoin rallied from a fraction of a penny to over $1,100… and then spectacularly crashed 85% to $185.
It looked like a classic “pump and dump” to me. That’s why I ignored it.
But then something very interesting happened.
Instead of collapsing back to pennies, bitcoin found support in the $200 range. Even after the bubble popped, bitcoin was still worth billions.
This intrigued me because true Ponzi schemes have zero value when they crash.
The fact that bitcoin was still attracting buyers even after the onslaught of negative news… an 85% price crash… and universal scorn… said something to me.
It said that maybe this asset had real value. At the very least, it told me that more investigation was needed.
Lessons From the Dot-Com Bubble
I’ve seen skepticism like this before…
Back in May 1997, Amazon went public at the split equivalent of $1.30.
Amazon shot up to $113 during the dot-com bubble of the 1990s. When the bubble popped, Amazon crashed 94%—to the split equivalent of $5.97.
But again, something interesting happened…
In the depths of the dot-com hatred, Amazon started quietly climbing in price. Back then, I made the mistake of dismissing this action.
My error was buying into the prevailing belief that dot-com stocks were dumb and worthless.
I listened to the narrative instead of digging deeper into the Amazon story.
That was a mistake of lazy thinking.
So when I saw the same thing happen with bitcoin, I decided to do something different.
Instead of listening to the skeptics, I asked myself: “Why are people still buying this supposedly worthless asset?”
That’s when I did a deep dive into bitcoin.
I traveled all over the world interviewing experts, development teams, and venture capitalists. I wanted to understand why bitcoin had value.
Even Governments Are Embracing Bitcoin
Just as important, I wanted to know what would stop the U.S. government from banning it.
How would the currency outgrow its widespread reputation as a form of “black money” used by criminals?
What I found out was this: At its core, bitcoin is just a way to send and receive value without the need for a trusted middleman.
Bitcoin has no central location. That means no government (including the U.S. government) can ever shut it down.
In fact, several countries have already tried to ban bitcoin and found that it was impossible.
At least two of them (Russia and India) have decided to recognize bitcoin as money.
Governments are realizing that it’s better to have a hand in how bitcoin is shaped and regulated than try to destroy it (which they can’t).
Think back to when the U.S. government finally realized that prohibition was unenforceable. Better to regulate alcohol and tax it.
Where’s the Future Value?
The real strength of bitcoin is the underlying network of highly secure computers that support it (called the blockchain).
This is where much of the value creation will come from.
As I write, software developers across the world are building applications designed to piggyback off this network.
Over the next three years, we’ll begin to see a slew of new applications emerge for bitcoin and the network that supports it.
They will support everything from asset tracking to recording land registries.
And much more that we can’t even think of yet.
That’s why bitcoin will continue to grow in value.
Since those obituaries started popping up in 2011, bitcoin has rocketed from a low of 75 cents to as high as $3,030—an astronomical 404,000% gain.
The next time you find yourself being scared out of owning bitcoin by a negative article, do yourself a favor… Read the last 135 times bitcoin was declared dead.
Regards,
 |
Teeka Tiwari
Editor, The Palm Beach Letter
With soft housing data last week and higher interest rates expected, it is a good time to ask:
Is the housing rally over?
Last Week Recap
The big economic news last week was the Fed policy decision and guidance. Friday’s announcement of the Amazon purchase of Whole Foods grabbed the headlines. Attorney General Sessions’ Senate Testimony got the gavel-to-gavel treatment.
Our question from last week – a possible change in market leadership – did attract some discussion. Friday’s grocery news is still being digested, but the sector shifts were pronounced.
The Story in One Chart
I always start my personal review of the week by looking at this great chart from Doug Short via Jill Mislinski. Despite the mid-week Fed announcement, the result for the week was barely changed.
-
I know Mike is a very solid investor and respect his opinions very much. So if he says pay attention to this or that - I will.
~ Dale G.
-
I've started managing my own investments so view Michael's site as a one-stop shop from which to get information and perspectives.
~ Dave E.
-
Michael offers easy reading, honest, common sense information that anyone can use in a practical manner.
~ der_al.
-
A sane voice in a scrambled investment world.
~ Ed R.
Inside Edge Pro Contributors
Greg Weldon
Josef Schachter
Tyler Bollhorn
Ryan Irvine
Paul Beattie
Martin Straith
Patrick Ceresna
Mark Leibovit
James Thorne
Victor Adair