Tuesday, June 4, 2013

Marc Faber: The World Is a Mess, But Junior Mining Stocks Could Double

by JT Long
The Gold Report

The world’s economy is in tatters and safe havens are few and far between, says legendary contrarian Marc Faber. The banking crisis in Cyprus has shown that even bank deposits are not safe. The publisher of the Doom, Boom and Gloom newsletter, surveying the world from his perch in Hong Kong, discusses the impact of unemployment in Europe, the economic slowdown in China, asset bubbles and the turnaround prospects for precious metals miners. Faber also reveals his investment strategy for these volatile times in this interview with The Gold Report.
The Gold Report: Marc, I recently interviewed James Turk who said that Europe is in a banking crisis, but that some countries are in worse shape than others. Are things on the continent as bad as they seem to be from the headlines in the U.S.?
Marc Faber: Unemployment is high in both Europe and the U.S., particularly for young people. One reason for the high unemployment rate is that it is very difficult to find highly specialized workers for industry. Perhaps that’s due to more university students studying non-user-friendly subjects, such as philosophy. The Western world is lacking in well-trained workers who can handle industrial machines that cost $10–20 million ($10–20M). But if I need a clerical assistant for financial services, I can find hundreds and hundreds of applicants.
Continue Reading at TheAuReport.com…
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Hedge Funds Are Heavy Short Gold

goldsilverworlds.com / By Zentrader / June 3, 2013 
Nobody ever said riding gold would be easy and Friday was a perfect example of that.  No doubt gold can be a heart-breaker and it’s obvious the short traders went after those who entered with Thursday’s break or who over-leveraged their hand.  The newly minted longs from that bullish breakout of the ascending triangle were the target on that sell-off.  Because it has been such a long grinding bear market, longs are still weak handed and skittish.  That’s why we find all major rallies out of lows riddled with sharp 1-2 session sell-offs and it’s why Investors need to widen their horizon when trading it.
I mentioned in Thursday’s trade alert that we could expect a back-testing sell-off from that breakout, and that would be normal.  But I did not expect to see anything more than a retest of the breakout line around $1,394.  I certainly did not see a move all the way back into the ascending triangle.  So this week will be an important week for gold because if this is a Left Translated Cycle, then Friday morning would certainly have marked the top of this Daily Cycle.  In that case, gold will fall right through the bottom of this triangle pattern and not look back.
But I still don’t hold too much weight towards it; I’m acknowledging the possibility so we could prepare for it.  I’m still treating this as a shakeout move that is part of a continuation higher.  If you found Friday’s drop painful or you were selling into the drop then you were either not mentally prepared or over-leveraged.  Technically the Cycle is fine and it has not dropped below any key level.  Gold is still early being on Day 10 while still trading above the 10dma.
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Tempur-Pedic International Inc. (NYSE: TPX)

Tempur-Pedic International Inc. engages in the manufacture, marketing, and distribution of bedding products in North America and internationally. It offers mattresses, pillows, and adjustable bed bases, as well as various cushions and other comfort products. It offers mattresses, pillows, and adjustable bed bases, as well as various cushions and other comfort products under TEMPUR and Tempur-Pedic brand names. The company sells its products through furniture and bedding retailers, department stores, hospitals, nursing homes, healthcare professionals, and medical retailers, as well as through its call center operations, company-owned stores, third party distributors, and Internet. Tempur-Pedic International Inc. was founded in 1989 and is headquartered in Lexington, Kentucky.
Before discussing potential trading opportunities, please take a look at the 1-year chart of TPX (Tempur-Pedic International, Inc) below with my added notations:
1-year chart of TPX (Tempur-Pedic International, Inc) TPX had been rallying strongly since November up until the end of March. Over the last (3) months the stock had found support at the $45 level (red). In addition, the stock seemed to be hinting of a potential breakdown with its series of “lower highs” (blue) in the face of a rising stock market. Well, last week the stock broke that $45 support and should be moving lower overall from there.
The Tale of the Tape: TPX has broken its support at $45 and the stock has started moving lower. A short position could be entered on any rallies back up near $45 with a stop placed above that level. A break back above $45 would negate the forecast for a move lower.
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Rick Rule: Why Gold Collapsed 15% in Two Days

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Dollar Plummets – Gold Soars

from Dan Norcini:
Up, Down; Up, Down; Up, Down… On and on it goes. Today’s big market moving data was the ISM manufacturing number. It came in under 50, surprising nearly everyone on the planet. As a matter of fact, the reading at 49, was the lowest since June 2009! That is saying something indeed.
As soon as that number hit the wires, the currency markets erupted in a turmoil. The usual knee-jerk reaction hit Dollar/Yen and up went the “safe haven” Yen (I still have a hard time putting those words together in one phrase for the sheer idiocy of the rationale behind it), up went the Euro and down plunged the US Dollar, falling through a strong support level I might add.
Read More @ TraderDanNorcini.Blogspot.com
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Market Recap For June 3, 2013

Market action continues to be very choppy as opposed to what has been experienced for much of 2013.   Futures were mildly positive at the open but jerked around violently on a poor ISM Manufacturing report which indicated a contraction of the sector at a reading of 49 (anything below 50 is contraction).  After some whip saw action buyers came in later in the day and the last hour saw a lot of buying as it appears trading were trying to position themselves for "always up Tuesdays".   Most of the leaders on the day however were broken down names in broken down sectors, while a lot of leadership stocks didn't do much.  The S&P 500 gained 0.59% and the NASDAQ 0.27%.
The NASDAQ continues to outperform the S&P 500 technically (a tad) even if today the S&P 500 had the better gains; that was more related to a lot of beaten down sectors such as utilities, consumer staples, et al bouncing.  The S&P 500 broke the 6 month trendline in purple intraday but recovered it by the close; it remains below the 20 day moving average.
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