Timing & trends
It’s official. Canadians now spend more on taxes than they do on food, housing, and clothing. Well, politicians have to eat first. Their kids have to be educated to rule their generation.
The Fraser Institute has calculated that the average Canadian family now pays $34,154 in taxes in total, which includes all the “hidden” business taxes that are passed along in the price of goods and services. They have distinguished the visible and hidden taxes that would now equal 42.4% of the total average Canadian family income in 2015, which they have estimated at $80,593. The Fraser study estimates the average Canadian family spends $30,293 on housing, food, and clothing or about 37.6% of the family’s income.
This will only get worse for politicians always know how to spend other people’s money while pretending they will someone give them more, which never materializes. In the 1930s before income tax, the woman traditionally stayed at home to raise the children because it was normal for one income to suffice to feed the family. Now it takes two incomes and the women MUST work in the average family. It is no longer possible to survive on just one income.
The divorce rate has risen with taxation. The number one reason for divorce is always money. The divorce rate peaked in 1981 with the peak in the Economic Confidence Model that marked the peak in the last public wave. What has transpired since then was an initial decline in divorce began with the Reagan tax cuts and the same is seen in Britain with Maggie Thatcher and Canada. Now note that also marriages have declined from 10.8% in 1982 to only 6.8% by 2012. Marriage is on the decline and children are living with their parents into their 30s. Now 18 to 34-year-olds who live with their parents has reach a record high of 31.5% in 2015. The birth rate has fallenfrom about 40 per thousand to only 10 per thousand from 1775 to 2000.
The bigger government grows, the lower the standard of living. But taxes are also reducing birth rates and marriages. Talk to girls under 30. The majority say they do not want to bring in children to this world.
Something is seriously wrong. But government is addicted to stealing the people’s money. That means this will not end very nicely.
…related: A Disturbing State of Affairs
AUGUST 23, 2016, 12:45 PM: Gold moved lower early during yesterday’s session, but came back up later on and finally gold ended the session only less than $3 lower. Can we view such a reversal as a bullish sign? Not necessarily – a reversal should be confirmed by high volume and yesterday’s session wasn’t. Consequently, one needs to look at other parts of the precious metals sector for confirmations.
The above action, however, provides bearish signals, not bullish ones. Let’s start with the USD Index chart (article published
Gold had a very good reason not to decline more – the USD Index moved higher a bit and then gave the gains away. The important thing, however, is that the support line remains intact – consequently, the outlook remains bullish.
As we wrote earlier, gold reversed, but the volume that accompanied the reversal was relatively small, which suggests that it wasn’t really a “reversal”, even though the price action may suggest so.
At the first sight it may appear that technical phenomena like reversals, or breakouts etc. are just more or less random names for more or less random price movements without anything that justifies changing the outlook based on any of them. In reality, these are simple terms that refer to phenomena that are indeed happening in the market and that were found to be usually followed by some kind of action. If enough of the reliable factors are seen, the outlook may indeed change.
In case of reversals, the thing that the single candlestick on the chart represents is the situation, in which one side (bulls or bears) attempted to push the price in one direction and got almost or mostly overwhelmed by the other side. If both forces equal each other, the price will not change in terms of daily closing prices (or weekly closing prices, which was more or less the case with gold last week). Now, if the price had been falling previously and we saw this kind of action, it means that the selling pressure was no longer significant enough to trigger further declines and at the same time, the buyers were stronger than previously. The implications would be bullish. Conversely, if the price had been rallying previously and we saw the mentioned kind of action, it means that the buying pressure was no longer significant enough to trigger further upswings and at the same time, the sellers were stronger than previously. The implications would be bearish.
The key thing here is for the above to make sense, there really has to be some kind of “fierce battle” between buyers and sellers. If there was none, we couldn’t speak of one side overwhelming the other and thus about bullish or bearish implications. How can we tell, whether one side really overwhelmed the other? By looking at the volume. High volume confirms the above as it suggests that there were high numbers of both buyers and sellers who participated in that session and low volume suggests that there are little implications of this session (in terms of viewing the reversal as important).
With the above in mind, let’s take a look at yesterday’s volume. It was relatively low. Consequently, it doesn’t appear that yesterday was the session when the sellers and buyers were fighting hard to push the price of gold in a given direction with buyers fighting back strongly – significant volume would suggest the above, and instead we saw a move lower and a corrective upswing shortly thereafter. Instead of being bullish, yesterday’s session was rather inconsequential by itself.
In the case of silver, however, we saw a decline on volume that we hadn’t seen in weeks. Consequently, while gold’s reversal wasn’t confirmed, silver’s decline was. The implications are bearish.
The volume wasn’t as huge in the case of mining stocks, but it wasn’t very low either and the size of the move is quite visible. Gold stocks continue to underperform gold and this is a sign that lower prices are likely to follow shortly (not necessarily today).
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager
related: Gold: All Eyes On Jackson Hole
What goes up does come down? Cycles do work, and we must follow the swings!
Cycles are a forecast of the possible support or resistance zones, price and volume action determine if the actual turn is likely. That is the difference between a forecast and the actual event! You can learn more about readtheticker.com cycle logic at our Jim Hurst pages.
Crude Oil up swing running out of juice!
Small Caps very extended, near the end, a down swing can be expected.
Investing Quote…
“Thus, I affirm, every class of phenomena, whether in nature or in the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause.” ~ William D Gann
“Markets are designed to allow individuals to look after their private needs and to pursue profit. It’s really a great invention and I wouldn’t under-estimate the value of that, but they’re not designed to take care of social needs.” ~ George Soros
“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” ~ George Soros
“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.” ~ Bernard Baruch
“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.” ~ Warren Buffett
related: Gerald Celente Sees Worst Market Crash, New Military Conflict, and Gold Spike to $2,000/oz
In 2010, my eldest daughter was preparing to leave for university and I wanted to do something special for her. So trying to be a good Dad, I decided to write her a brief letter on what I had learned over the course of my own career that I thought would be helpful to her. My successes, failures and a few principles that guided my actions. She graciously agreed that it was a good idea and that I should write the letter.
In the letter, I wrote down a handful of principles of what had worked for me, as I had literally gone from the stock room to the board room, and felt that I had some good ideas to offer her. However, when the letter was complete, I read through it and realized that something was missing. While the suggestions were good, it was missing my overarching philosophy or approach to my career, not just the steps that I took along the way. It wasn’t the things that I did in my career, it was my mindset that was important. My approach had been one of a growth mindset and that I believed in developing good habits and constant progress towards worthy goals. So I added to the letter that whatever she does, she should strive to develop good disciplines and habits to help her along the road.
After finishing the letter, I decided it was an important message for other people too. If was take this idea of continuous improvement through the development of good habits and turn it into a book, it would help many more people, so that is what I decided to do. Rather than just talk about it, I decided to describe each of the 100 Daily Habits that I felt were important and that I would improve each day. I believed that it was not about doing 1 thing 100% better, but it was about doing 100 things, 1% better each day.
Fast forward to 2016, and 73,000 words later, the book is in the final stages and will be released this fall. It’s called The 1% Solution – How Small Daily Improvement Produce Massive Long-term Results. I fundamentally believe that in life there’s no short cut. Rather, the path to significance is achieved through the continuous and daily improvement of habits, which compound over time to create big results. It takes time, effort, and perseverance to develop these good habits and the more time to see the cumulative effects turn into results.
Creating this book has been a labor of love since I was really focused on creating something that would help people overcome their own obstacles, so they can achieve their own big dreams and goals.
If you want to know more about it, you can get early notification of my book by here.
Thanks and stay tuned,
Eamonn
related:
Summary
Looking back at 20 years.
Forward returns are historically muted as cumulative days increase.
Approaching record levels.
As shown by our chart above, we haven’t had a 1% move in 31 days now for the S&P 500 (NYSEARCA:SPY). This is starting to approach record levels since 1996.
….related:
-
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