In search of intrinsic value

Guido Romero Rank: 97 Followers: 4 Votes: 1 Years Member: 7 Last Update: 28 March 2015, 8:04 Categories: Relative Performance Charts
Gold / Gold Stocks
Currencies

Mar 7/15 - Dangerous close for the precious metals bringing the Fib retracement levels that have not yet been satisfied, back in play. CEF is now selling at a discount of 8.5% and it appears to me that there is still a flow of money into bullion (rather than stocks). Still waiting to close a gap on the GLD/FXE chart but gold in other major currencies looking better than in US$ for now. The Australian Dollar has broken an important level to the downside... the Canadian $ is holding on by the skin of its teeth... the Euro is going the way of the Dodo... Expect some extraordinary events in the following 18 months!

Feb 15/15 - Unprecedented global monetary policy has driven interest rates to unthinkable low levels thereby pushing ever greater amounts of hot money into sovereign bonds in general and US sovereign bonds in particular. It can be argued that this the THE bubble to beware of. The question is what happens if money moves out of bonds. Considering that all major currencies are being trashed with increasing fervour, there is a school of thought that offers that, as cities, municipalities and then eventually sovereigns declare bankruptcy, hot money will come out of bonds and, for lack of a better shelter, will go into the US equity market thereby igniting a last furious rise in the major US stock indices to dizzying hight.

Jan 21/15 - There is a quiet flow of money going into CEF. We have a gap to close at around 13 but the money flows are looking solid.

Jan17/15 - Some good developments on the bullion front. The monthly chart of gold has a positive MACD cross over (the month is not over yet) and the price of the metal has regained an important technical level. The Gold/Euro chart is looking good but we have a gap to fill on the paper market for gold as represented by GLD. Gaps are always troublesome and the paper market still holds sway for the price of bullion. The Swiss are up to something and only in the ripeness of time shall we find out what it is. The mining share market is showing signs of life but

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050 - $GOLD:$XEU - Monthly Candlesticks, Landscape

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Jan 14/15 - If history should repeat (a big if), an RSI cross over is quite propitious to coming price action. Conversely, it may not be so propitious for the Euro
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100 - $SPX since 1980

Mar 10/15 - There is a school of thought that holds that as the US$ rises, capital will be drained from global markets and will concentrate in US$ assets. In this scenario, the US bond and share markets may suffer temporary wobbles as the storm buffets global markets but, eventually, the US share market will be the last refuge of capital (which will also eventually leave the US bond markets) driving it to dizzying highs.
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Dec 3/14 - The US$ has recently broken out of a long basing pattern. I am going out on a limb here to say that this is, in my opinion, the beginning of a tectonic shift that is heralding asset price deflation. If this should indeed be the case, this 700 points formation is looking ever more probable...
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101 - US$ purchasing power versus CPI

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Mar 2015 - This may come a bit late. The underlying conclusion of the search for intrinsic value in this monetary context and at this particular junction, must necessarily lead one to completely divest of any property in descending order. Immobile property such as real estate is the first to succumb to the fiscal impasse of the sovereign. All other property in descending order will too succumb in turn. The more liquid the property, the farther down the line of extortable (if the word exists) priorities it lies. Art and collectibles will too be taxed particularly those items that have a paper trail.
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Dec 2014 - The recent US$ breakout that I've been tracking since 2010 is a powerful signal. If this change is confirmed by the price taking out the 95 - 100 level convincingly, this would indicate a significant change in the financial landscape of the past twelve years. Most importantly however, my opinion is that this is the manifestation of global asset price devaluation. If I am correct in my assessment, this would imply that going forward a lot of money is going to leave some highly leveraged positions notably in emerging markets. Too, if the change we are currently witnessing should develop at the same speed, a lot of hedges and derivative positions are going to generate significant losses for sovereigns, sovereign funds, investment funds and pension funds. Adapting to this new reality for large investors is going to be fraught with traps and dangers of all sorts, just at a time when we are witnessing unprecedented economic, financial and monetary conditions...
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103 - Emerging Markets Free Index

Jan 5/15 - I am adding this index of Emerging Markets to monitor the US$ advance. If the US$ breakout is sustained, it should play havoc with EMs. One curious thing is how this chart is very similar to the chart of crude. Coincidence...?

105 - 30years US Treasury Bond since 1980

110 - $SPX, the 30yr US TBond and the US Dollar since 1980

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Dec 3/14 - This is an important break out. It may very well herald a period of asset price deflation in which case the major indexes may not fare as well going forward...
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Apr 15/14 - The reason I think the US$ is on the rise is not due to a belief of economic or financial strength in the USA. Rather, the Dollar is headed higher simply because the currencies of member countries that have adopted the US$ as reserve currency (Floating Exchange Rate Mechanism) must arithmetically suffer from aberrant US$ monetary policy...
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120 - $SPX and gold since 1980

125 - Gold since 1980

126 - Gold bullion inflated by the purchasing power of the US$

127 - Mining shares investment sentiment

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