The markets in the US have entered a mania in which investors look for any and all excuses to push the markets higher.

Case in point, yesterday Japan’s Nikkei fell 6%. This happened in spite of the fact the Bank of Japan is currently engaged in a QE policy equal to over 25% of Japan’s economy.

And yet, despite this collapse (and the obvious implications for other markets that are being juiced by QE… namely the US), traders pushed stocks higher because once again, the Fed’s mouthpiece at the Wall Street Journal, Jon Hilsenrath, published a story about the Fed not wanting higher rates (which they took to mean the Fed willnot taper QE).

As a result, the S&P 500 bounced off its 50-day exponential moving average, which has become the line to defend for the bulls (see the chart below). When we break this line, the dam breaks…

The key question here is: what exactly is the Fed planning on doing?

Earlier this year, rumors abounded that Hilsenrath might publish an article on the Fed tapering QE. Stocks tanked. Now we get another article from Hilsenrath that the Fed probably won’t taper QE, and stocks rally.

This is the markets we are dealing with: one in which any article published by a man who traders believe is speaking for the Fed will drive the entire market one way or the other. One wonders what would happen if investors ever realized that the Fed actually is just making its policies up on the fly and doesn’t have an exit strategy or worse, could never actually engage in an exit strategy without kicking off another Crash.

For more market insights and investment ideas, visit us at: www.gainspainscapital.com

Best Regards,

Graham Summers

I’ve been warning subscribers of my Private Wealth Advisory newsletter that we were heading for a dark period in the stock market. We’ve since taken action to insure that when the market falls, we make money.

Indeed, in the last month alone we’ve seen gains of 8%, 12%, 21%, and 28%… all from basic stocks and bonds. And we’re now preparing with six carefully targeted investments that will pay out when the market falls.

To find out what they are, all you need to do is take out a trial subscription to Private Wealth Advisory. You’ll immediately be given access to the Private Wealth Advisory archives outlining our investment strategies.

You’ll also be given access to FIVE Special Reports (an $800 value) outlining the biggest risks to the financial system as well as the best means of protecting yourself and your loved ones from them.

To take out a trial subscription to Private Wealth Advisory and take action to make sure the coming months are a time of profit, not pain.

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Best Regards,

Graham Summers

The two most popular investments a few years ago have been dormant and out of the spot light. But from looking at the price of both gold and oil charts their time to shine may be closer than one may thing.

Seasonal charts allow us to look at what the average price for an investment does during a specific time of the year. The gold and oil seasonal charts below clearly show that we are entering a time which price tends to drift higher.

While these chart help with the overall bias of the market keep in mind they are not great at timing moves and should always be coupled with the daily and weekly underlying commodity charts.

Now, let’s take a quick look at what the god father of technical/market analysis shows in terms of market cycles and where I feel we are trading… As I mentioned last week, a picture says a thousand words so why write when I can show it visually.

John Murphy’s Business Cycle:

MATURE STOCK MARKET

COMMODITY INDEX LOOKS BULLISH & SHOULD RISE:

Precious Metals like gold and silver are nearing a bounce and possible major rally in the second half of this year.

Crude oil has been a tough one to trade in the last year. The recent 15 candles have formed a bullish pattern and with the next few months on the seasonal chart favoring higher prices it has been leaning towards the bullish side.

In short, I feel the equities market is nearing a significant top in the next couple weeks. If this is the case money will soon start flowing into commodities in general as more of the safe haven play. To support this outlook I am also factoring in a falling US dollar. Based on the weekly dollar index chart it looks as though a sharp drop in value is beginning. This will naturally lift the price of commodities especially gold and silver.

It is very important to remember that once a full blown bear market is in place stocks and commodities including gold and silver will fall together. I feel we are beginning to enter a time with precious metals will climb but it may not be as much as you think before selling takes control again.

Final thought, This could be VERY bullish for the Canadian Stock Market (Toronto Stock Exchange) as it is a commodity rich index. While the US may have a pullback or crash Canadian stocks may hold up better in terms of percentage points.

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Chris Vermeulen

The founder and chairman of Sprott Global Resources Investments tells you how he would invest in the yellow metal right now…

With gold prices near two-year lows through much of 2013, a bargain-hunter asked a show called Money Morning TV how to invest $100,000 into Gold right now. They called Rick Rule and here are his answers (you listen to his full answer on video below the written summary). 

Rick Rule Says

1. he’d put at least 1/2 of the money into gold bullion. (Ed Note: A good article by Larry Edelson on The Wrong and Right Way to Buy Gold Bullion)

He would put the balance into the Equities and he would do it either by:

2. Selling puts on some of the bigger Gold Companies. This means if the price goes down he buys them for less than the current market. If the price doesn’t go down he gets to capture the put premium. (Ed Note: An thorough article by Michael Campbell on How to use Options to Invest).

and or…

He would personally buy riskier pre-production companies that have very very very high quality preliminary economic assessment or pre-feasibility style numbers. 

Sprott thinks that the major and intermediate mining companies will be forced back into the acquisition market in 9-12 months. These are assets that depreciate fairly rapidly and in order to maintain their production they are going to have to come back into the merger and acquistion markets. Rick also points out that it is currently cheaper to buy a stock on the Toronto Stock Exchange than it is to go out and find it. “So those look like the sweet spots to me”. 

Rick goes on to state that those unfamiliar with the sector need to understand one truism. If you think Gold is going up, buy Gold. Realize that “Gold Stocks do not necessarily mirror the price of Gold. You have to buy Gold Stocks because there is something intrinsic to that company where you believe that they are adding value relative to the rest of the sector. It is very, very critical that people understand that. That Gold Stocks are not a proxy for Gold. Gold is a proxy for Gold.” 

 About Rick Rule:

Mr. Rule has dedicated his entire adult life to many aspects of natural resource securities investing. In addition to the knowledge and experience gained in a long, successful and focused career, he has a worldwide network of contacts in the natural resource and finance worlds. As Chairman of Sprott US Holdings, Mr. Rule leads a highly skilled team of earth science and finance professionals who enjoy a worldwide reputation for resource investment management.

Mr. Rule is a frequent  speaker at industry conferences, and is interviewed for numerous radio, television, print and online media outlets concerning natural resource investment and industry topics. He is frequently quoted and referred by prominent natural resource oriented newsletters and advisories.  Mr. Rule and his team have long experience in many resource sectors including agriculture, alternative energy, forestry, oil and gas, mining and water. 

Sprott US Holdings is active in securities brokerage, segregated account money management and investment partnership management involving both equity and debt instruments, across the entire spectrum of the natural resource industry.

Contact: rrule at sprottglobal dot com

»» Most equity markets pulled back for the third-straight week, except the U.S. managed to drift higher following Friday’s slightly better-than-expected employment gains. Safe-haven government bond yields rose again across regions.

»» The obsession about when the Fed will begin to taper will likely persist for months. Our economist has long argued tapering could start in October if employment growth remains near recent levels.

»» Global Roundup: Statistics about the magnitude and duration of previous S&P 500 selloffs since 1945; highlights from Canada’s strong employment report; update on Europe’s economic trends; summary of Japan’s “third arrow” reform efforts. (pages 3-4)

For the complete Weekly Report as well as Daily Updates CLICK HERE.

The Future of the World Economy & Capitalism vs Marxism (that is the question(

Civil Unrest has been what our model was forecasting. What is happening everywhere is just amazing. Government is so out of control and all this is about is holding on to the reins of power. They have totally forgotten what “free” societies even were supposed to be, In Turkey we have massive riots against the President trying to impose Islamic rule as people demand separation between religion and state.

….read much more HERE

The Future of the World Economy – Les misérables

Germany’s constitutional court has begun its hearing over the legality of the European Central Bank’s bond buying program today. The German high court is not the political football we have for a judiciary in the USA. They are rather independent. The head of the court said the success of the program wouldn’t be relevant for “Otherwise, the end would justify the means.” 

We are looking at a potential political power struggle between Germany and the euro zone. 

…..read more HERE

Capitalism or Marxism – That is the Question

The need to educate the masses grows and has never been greater than right now. Frustration has Londoners rioting for freedom and against “capitalism”. They are unaware that the capitalism they know is Marxism in disguise and true capitalism brings freedom. The Marxist Agenda is more power to the state and they control everything. There are corrupt bankers and there are corrupt politicians. This does not justify handing all liberty to government to achieve what?

……read more HERE