Daily Archives: August 1, 2018

Real Estate: The Biggest World Bubble In History Review!

In Toronto the real estate bubble has already burst and will decline for the next 3 years or even longer. Deflation is the real threat as the world fertility crash intensifies. I have family members that are going to get very hurt hanging onto extra homes as investments, or they hope to flip them. By that time listings will explode and prices will start to crash faster than you can sign a mortgage.  Home investors do not realize that they are playing a severe leveraged game that even a futures traders would not do, yet it’s normal for the public to leverage themselves to the max!

Our Vancouver scene is a bit different, but it has developped a flat top which will never hold. Now look at the 2009 dip when real estate also crashed, to say it can’t happen again is serious mistake. You can’t sell a home at the speed of a mouse click, so there is no liquidity in the housing market. Buyers are refusing to show up just like in the 1926 Florida crash.  I’m sure that any young couple that waits for 3 years or so will see this inflated world present, a totally different picture.

There are about 18 million empty homes in the USA and about 8 million empty homes in Japan. Toronto seems to have 99,000 empty homes, with BC having less. Investors will run to the exits when they panic and this deflationary crash is just getting started.

Hits: 8

Apple 10 Day Mother Of All Gaps!

About the only “FAANG” stock to still take a hit is Apple. Every hedge fund loves this stock and Warren Buffet owns billions of shares. The huge open gap to the upside is more like an exhaustion gap, and it will get filled again. Facebooks gap may never get closed as these growth stories do come to screeching halts and even disappear!

Yes, I’m very bearish on all asset classes except for the US dollar. The world investors are sitting on a Death Cross that they know little about, and they may wake up once the stock markets crash right along with gold.  I keep gold ratios on about 10-15 asset classes which are all in-house indicators that tell me when any asset class is out line, to the cash price of gold. This Gold/Apple ratio now sits at a ratio of 6:1 the most expensive reading in my records. For the last 2 months it’s been under 7:1, so that tells me the Gold/Apple ratio is hitting a brick wall!  Fundamentals will always tell you the wrong things at the extremes and Apple is no different.

Hits: 4

Crude Oil: A look at the August Contract Bear Rally.

Fundamentals will “always” tell you the wrong things at the extremes. Was the 2008 peak extreme enough for you? This was also a mania oil peak and part of the 30 year cycle as well. Gold stocks peaked out 3 years later and have been in a bear market ever since. Oil is not on some rocket ride to the moon, as high oil prices kills any real profit growth.  Does this “wedge” look like a promosing trend, because if it does you better learn what a rising wedge can do to a long portfolio. Then add a few death crosses to the mix, and we have about the most skewed oil trade in history, that has only one way to go and that is down. Please do not whine about fundamentals as in the traders world, they are called “Funny-Mentals”. Markets will always travel in the direction that will do the most harm to the complacent investor.

This oil COT report is so skewed that there is no chance any big bullish move is still ahead of us. The top part is all the spectulators and hedge fund positions, that are all extremely leveraged to the upside. Well, when things don’t go their way they will panic and run at a moments notice.

Over the years I  have developped my own in house indicators using a dozen or more gold ratios, which I used to call the 2008 crash. This is when the Gold/oil ratio was about 9:1. We are at about 18:1 right now and in 2014 this ratio hit 17:1 before the oil price imploded. No extreme ratio exists in the Market Vane report yet so that will change by the end of this year. My Market Vane subscription will run out and I don’t plan on renewing it, as I have enough in house indicators to track.

Oil is going to suffer a huge price crash that will be part of a the “deflationary market crash”, not experienced by anyone still alive today. Stock markets and all commodities had Cycle degree wave 3 bubble peaks and their corrections are still far from over.

If you are a trader then I suggest  to always have an emergency phone number  that you can all and they will execute to your insructions. The reason I say that is because our local power went dead in the middle of posting this oil chart.

Hits: 1

GDM: Gold Miner Index Bear Market Review

 

GDM is another gold stock index and I look at it from time to time,  as an alternate source of data besides the HUI.  Gold stocks slumped a bit more this morning, and from my perspective the bearish rally is breaking down. It peaked just about two years ago, and is heading down to a new record low by this fall. Right now the angle looks harmless, but these moves can drop in a vertical move, that can also produce a huge gap.

I can’t give a more simple or direct description in what a bear market rally is, “any bear market rally must retrace all and back to below the point of orgin.”  When I see wave analysts turn a bear market rally into a bull market, then I get choked how much they will cause the unsuspecting investor  to lose money.  This is not the time to invest when gold hit a 30 mania peak in 2011. There is always a time when to invest in gold stocks and another time when to trade them.  Trading started back in 2011 and will continue until the 2021 time period or when solar cycle #25 starts to rise from the northern part of the sun.

The sun can breakup a bearsih mood pretty quick once it gets going.  XAU is also another gold stock related index which I check as well.

 

Hits: 6

Canadian Dollar Weekly Chart 2002-2018 Review

In late 2007 our CAD peaked, and then started to crash. The angle with few subdivisions is normal in a zigzag type of a crash. Cycle degree wave three peaked in 2007, and the entire formation sure looks like a zigzag from my perspective. This is what gold will eventually look like in about three years time, so we have lots of real world examples to look at.  Yes we had two bottoms in the Canadian dollar bear market, but many times we get three bottoms, like in a triangle. Gold investors need for the CAD to soar if the USD is going to plunge.

Since the 2016 bottom the CAD soared, but I see this as a classic 4th wave zigzag bear market rally. All bear market rallies retrace back to the point of origin and lower.  Until that plays out I remain very bearish, as our CAD has still a long way to fall. Commercials are net long already but I think the 50-200-day MA Death Cross has more power. The Death Cross has completed in the daily and weekly charts, with the monthly crossing still to come.

My Market Vane report only shows 50/50 bulls present which means nothing to me, as I look for skewed numbers, like only 6% bulls present. The  two days last week were 50 and 50, which I would like to see below 30% bulls. We also have a huge falling wedge which itself is very bullish, which will be for a future CAD bullish phase. This bearish phase is far from over as Canada is still going to get hit hard because we produce a lot of commodities.

 

Hits: 12