Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Cycles Impact on Financial Markets

Stock-Markets / Cycles Analysis Oct 23, 2009 - 01:28 AM GMT

By: HRA_Advisory

Stock-Markets Mayan Indian elder Apolinario Chile Pixtun has restated his belief that the world is not going to end in 2012. Or more precisely, that his beliefs don’t suggest the world should end despite it being the end of a major cycle in the Mayan calendar.  According to China Daily, he is even more emphatic that he’s tired of being asked about it.  2012 is the end of a 5126 year cycle (end of the 13th of 13 Baktun).  It also ends a 26800 year cycle that may relate to the Earth’s wobble, which is useful for gauging the drift of seasonal climate changes.  China Daily also briefly mentions predictions by 16th century (Christian calendar) French herbalist Nostradamus that is being combined with the Mayan cycles to create buzz for a spate of movies and TV specials.


The Nostradamus’ predictions appear to be linear rather than cyclical. It’s hard to say since, like most good prophesy, they’re in code.  The cycles described in Mayan calendars still have the more universal appeal. It’s comforting to think things will come around again.  Mesoamericans outlined complex calendars that, we’re told, are quite accurate.  That does make them useful to time planting, and also to justify the timing of power shifts.  We assume feeding people generated much of the early buzz around star gazing, but as usual the technical breakthrough brought hangers-on.

Perhaps it will be 2012 when western economies at the centre of the debt/housing bubble hit that wall of resignation that creates a final bottom.  That will partially depend on how the interest rate cycle plays out in each of them.  Capital will continue to seek the safety of bonds for a while yet, assuming its not central banks doing all the buying. As long as yields stay low mortgage resets will keep some weaker players afloat.  Bottoms are marked by capitulation, which for debt usually comes when rising interest rates submerge those still treading water.  Yields would normally have to go a long way to generate this impact but this cycle features many overextended borrowers that need plenty of time to earn down debt loads.

Right now there is much confusion about whether a “typical” market cycle even applies. Asian growth economies that function somewhat differently than western markets (and differently than each other) are clouding crystal balls. These effects are skewed even more by price shifts against currencies. We seem to be between cycles, and probably are.  In our little bit of the galaxy this means coming up with a new gauge for the price vs. stocks equation for copper and some other metals.

Most of the capital that flowed into copper earlier this year plans to use the stuff at some point, and sees potential for a supply squeeze.  The question is whether taking a gain now will be rewarded with a lower buy-back price before the stocks are needed.  Normally that would work but with metals being used as inflation hedges and pair trades against weak currencies prices (at least dollar prices) have gotten detached from the inventory cycle.      

Notwithstanding last week’s new highs for gold, producer stocks move hesitantly, with plenty of traders waiting for “the other shoe to drop”, whatever that might be.   Metals in general are continuing their anti-dollar rally.   While we would still like to see falling inventories on the base metal side inventory levels have at least been flattening in the case of most metals and falling for zinc and aluminum.   There is fear of bubbles and a multiplying list of grumpy bears now that the Dow has added a digit the way gold already had.   Yes, a lot of this has to do with a flood of liquidity and speculation on what level profits (or the USD) might be at a year or two out.  But, as we’ve noted several times recently its better to deal with the market that is than to try and tell it what to do.

Even though it’s considered the height of irrationality by some, renewed strength in many asset classes can continue as long as central banks flood the markets with liquidity and drive down the returns on competing assets like government debt. 

The day may come when that won’t work any longer and bond yields take off so taking profits regularly continues to be a good idea.  The day may come sooner when other central banks, the ECB in particular, start trying to jawbone their own currencies lower which could give the greenback a bounce and metals a correction.  We expect that would be a correction however, not a panic, and those central banks will still have to prove they can back up words with actions. Jawboning is only a stop gap measure and the Dollar Index has breached several important technical levels on the downside. There will be support for most markets as long as decent economic stats continue to be reported and there is belief that the recession is at least easing.  While we agree this is mainly (but not wholly) a currency trade, the longs in commodities have reason to be skeptical that central banks will “get it right” or that some turn of events will create a new batch of Dollar bulls.  Central banks do no have the best of track records when it comes to controlling liquidity flows.

It would be nice to have some magic ratio that says “metal X is a buy when inventories equal Y and the US Dollar Index is at level Z”.  We would like to say we that we already know, but we can’t.  Unfortunately, we left our codebook in the other computer and, unlike Mayan calendars; we don’t think anything in this market is carved in stone. 


Gain access to potential gains of hundreds or even thousands of percent! From March to June, HRA introduced four new gold explorers to subscribers. Those four companies have generated an average gain of 205%, to date! SPECIAL HRA OFFER: For a limited time only, HRA is offering free reports and a subscription savings. Click here for more information: http://www.hraadvisory.com/sh2009.html

By David Coffin and Eric Coffin
http://www.hraadvisory.com

    David Coffin and Eric Coffin are the editors of the HRA Journal, HRA Dispatch and HRA Special Delivery; a family of publications that are focused on metals exploration, development and production companies. Combined mining industry and market experience of over 50 years has made them among the most trusted independent analysts in the sector since they began publication of The Hard Rock Analyst in 1995. They were among the first to draw attention to the current commodities super cycle and the disastrous effects of massive forward gold hedging backed up by low grade mining in the 1990's. They have generated one of the best track records in the business thanks to decades of experience and contacts throughout the industry that help them get the story to their readers first. Please visit their website at www.hraadvisory.com for more information.

    © 2009 Copyright HRA Advisory - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

    HRA Advisory Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules