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Wednesday, October 8, 2014

Possible turning point

Turning points are impossible to spot.  Since 2008 my greatest fear is US over-reaction to financial crisis will spur an even bigger crisis.  Since then some of my worst fears have come to pass including lack of law enforcement, fantasy accounting, and worst of all appeasement.

Some rule breaking in the depths of 2008-2009 was needed, best not to take all the medicine at once.  But there has not yet been a time to knuckle down and return to normal law.

Today, the Federal Reserve bank released it's minutes and the International Monetary Fund warned the FED of possible trillion dollar losses.

Instantly, gold miners EXPLODED higher, as well as gold, and the overall market.
The 3x Junior miner ETF rose 43% in about 2 hours, quite insane.

Unfortunately, what this looks like combined with my other posts is a shift internationally.

First the FED basically announced more of the same, appeasement since 2008, easy money equals all is lookin great!  I fear that once this buzz wears off we may see reality finally sink in that more of the same fixes nothing, combined with the world critiquing the Fed.

This fear may be unrealistic so we'll probably get our answer by February, if not earlier how this 'free money' announcement plays out.

Its hard to say if my post 'full route in gold before the going gets good' is now behind us.  Every fiber of me says we saw the bottom and say its all good to buy GDX between 20 and 22 (probably will pull back from high today).
The post I did Sunday details how insanely low GDX is, how HEAVY buying was this past Friday, so buying at 'bottom 10% range' is all good.

Good luck out there, if what I think happens unfolds, gold and gold miners will have a VERY rough ride climbing the wall of worry from here to 5x higher. Once GDX hits 100 bucks a share we may start to see political bs appearing. This will not be easy money and will take until 2017 to reach a peak.

And of course, the USD has taken a hit.

Good luck out there, some charts!


USD

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