McAlvany Weekly Commentary

Bullying a Gold Bull, Bad Idea!

Posted on 15 May 2013.

About this week’s show:
-3000 tons of “paper” gold sold in two days
-Physical buying of real gold hits records
-We’ve seen this before. Similarities to the 70’s

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Can this tiny stock generate 1,000%+ increase? : APDN

 

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A Bottom, Finally? From the April 2013 HRA Dispatch Eric Coffin

Just when it looked like things couldn’t get worse they got a lot worse. The gold market endured its worst two day drop in 30 years when massive selling took the price to $1325.   There were a lot of reasons given for the panic – and it was a panic – but the chief culprits seemed to be a short recommendation by Goldman Sachs, rumors of potential selling by several European central banks and fears that the US Fed was about to take the punch bowl away.

An added reason I think was unwinding of long Yen carry trades, some of which had long gold holdings on the other side.  Selling gold and yen to close out the yen longs and go short added pressure to the situation.   Large short holders in the gold market saw a profit opportunity and sold hard on the first day of the large drop, triggering stop loss orders as successive “resistance” levels were passed through. Once the drop hit the news wires retail holders of GLD and hedge funds that were just riding the trade continued the stampede. By the time gold bottomed on the Monday “everyone” knew it was a bear market and that the price had nowhere to go but down.

Is there any good news to be had in this scenario?    There may be though it’s too early to be sure.   One of the biggest problems with both gold and the market for companies that explore for and produce it has been the lack of a bottom.   The market has been awful but there were few signs you could point to that indicated a bottom might be in, or even on the way.  It was a slow motion train wreck that never looked like it would end.

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Herbalife Ltd. (NYSE: HLF)

Herbalife Ltd., a network marketing company, sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products worldwide. It offers science-based products in four principal categories, including weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition. The weight management product portfolio includes meal replacement, protein shakes, drink mixes, weight loss enhancers, and healthy snacks. The targeted nutrition products comprise dietary and nutritional supplements containing quality herbs, vitamins, minerals, and other natural ingredients. The energy, sports, and fitness products consist of products designed to meet the nutritional needs of athletes, such as Herbalife24 product line, which enables athletes to customize their nutrition program based on personal training and competitive demands throughout the day. The outer nutrition products include skin cleansers, toners, moisturizers, facial masks, shampoos and conditioners, body-wash items, and a selection of fragrances for men and women, as well as anti-aging products.
To analyze the company's stock for potential trading opportunities, please take a look at the 1-year chart of HLF (Herbalife, Ltd.) below with my added notations:
From September through the beginning of December HLF had been holding support at $45 (blue), which it eventually broke. Since then, the stock has rallied back up to that $45 breakdown level and hit it as resistance (red) on (3) separate occasions. A break back above that $45 level should mean higher prices for the stock.
The Tale of the Tape: HLF has a key level at $45. A long position could be entered on a break back above $45 with a stop placed under that level. Or, a short play could be made at $45.

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Lindsey Williams ~ Elite Not Ready To Collapse Economy YET - 14 May 2013

Lindsey Williams, who has been an ordained Baptist minister for 28 years, went to Alaska in 1971 as a missionary. The Transalaska oil pipeline began its construction phase in 1974, and because of Mr. Williams' love for his country and concern for the spiritual welfare of the "pipeliners,&quot ; he volunteered to serve as Chaplain on the pipeline, with the subsequent full support of the Alyeska Pipeline Company. Because of the executive status accorded to him as Chaplain, he was given access to information documented in his eye opening book, The Energy Non-Crisis.
After numerous public speaking engagements in the western states, certain government officials and concerned individuals urged Mr. Williams to put into print what he saw and heard, stating that they felt this information was vital to national security. Mr. Williams firmly believes that whoever controls energy controls the economy. Thus, The Energy Non-Crisis.

 Some Key Points released By Lindsey Williams in his recent interviews :
 - This is not a conspiracy theory it is an agenda
- Cyprus - The startling Real Story
- The American Dollar - How long?????
- Healthcare - A trap -America
- The world's only hope -Saudi Arabia
- Look out -Iran - Sabre rattling -Derivatives
- Collapse being discussed -(Behind closed doors, all of these things have been discussed)
- We Will See The Collapse of All Paper Money in a Period of two years Maximum The Elite are working for a date of the collapse of all paper currencies , it could be in a year or in a year and half , what happened to the banks in Cyprus will happen to New Zealand Japan Australia Canada and even America , you better get your money from your pension fund bank account retirement account , IRA , 401K or you will lose it all overnight
-The Federal Reserve is making some huge financial moves that will drive the USA deep into debt and decrease the buying power of the dollar. They will take them and use them as an investment in the derivative market. "They will hedge the derivative market." They will fractionally reserve all the mortgages and turn the $40 billion into $360 billion and make $1 trillion of off mortgage debt in 3 months. The banks receiving the $40 billion will turn around and take this money and buy treasury bills. It will go towards paying the debt of the US, not to improve the economy. Basically, the FED gives the bank money which they give back to the FED and the FED ads fees and interests which drives up the debt more.
 
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Waiting for a Correction Will Cost You Big Time! Says Baker

It's been six months, 300 points and 21% since the S&P 500 (^GSPC) began its ascent into record territory. The astounding, unbending rise has left countless casualties in its wake, especially those who have waited, and waited and waited for the better entry point that never came.

"It's extremely difficult to time this market," says Simon Baker, founder of Baker Ave Asset Management, in the attached video. "This is one of the most unliked rallies ever. The market continues to hit new highs and people are just getting more and more frustrated."

His advice: Stop waiting and get fully invested in stocks.

"Scared money does not make money. You need to be in equities at this stage," he says. "When the Fed, ECB and Japanese are throwing money into the market you need to be long U.S. equities."

A large part of his resolve comes from the fact that too many people are currently waiting for a correction. In fact, Baker says half of the audience at a recent high net worth conference he was speaking at admitted they were waiting for a 5% correction. (more)

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Don Coxe: Buying Gold May Have Downside Risk, “But The Upside Is Going To Be Enormous”

Legendary investor Don Coxe, Chairman of Coxe Advisors LLP, and former advisor to the $540 billion BMO Financial Group, issued a powerful new commentary entitled, “Money Makes the World Go Round”. 
In this updated piece, Don spoke to the staggering growth of the U.S. monetary base, indicating that when monetary velocity regains its speed, a “nightmare scenario” could unfold, with gold to money supply ratios exploding from levels, “so far [below] any all-time lows, so as to [defy] the description.”
Here is a highlighted segment taken from Don’s 30 min. commentary:

“What Ben Bernanke explained in a series of lectures last year, was the core of his strategy; A dramatic expansion of the U.S. monetary base, which shocked conservative republicans and…contributing to the big rally in gold. In his view, he had to do it to prevent a new depression. And he did that. But then he stayed with it, and his objective was to raise the value of the price of assets—he never mentioned gold of course. And he succeeded in the stock market, probably beyond his dreams.”
“At some stage there will be a transmission mechanism to move money from the fed’s monetary base, which is exploding at [a] 40% rate, and it will work it’s way into the money supply growth. Now that has to happen through what’s called a multiplier effect in the banking system, where banks create money by granting loans. That of course has not happened up until now, but there are signs that it’s emerging. And that is the big reason why the U.S. economy is doing better than most of the other big economies, because there is growth in lending in the U.S. banking system.”
(more)
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