2012 WHAT WILL THE NEW YEAR BRING?
I have just read through Larry Williams 2012 Forecast, and he appears to be in agreement with me about most of what I think is going to happen. He is my mentor, so I do tend to look at things in a similar fashion to him due to that, so it is not a huge surprise. I am going to do a quasi forecast over the next several days, with just a few things each day. The first market to discuss is of course Gold. It has been my position recently that the trend in this market has turned down now, and that we are going to begin a huge decline in this market. I have showed the reasons why I think that in previous posts, so I will not rehash those. These reasons were all based on trend lines and my bands I use to identify trends. Whether or not I think it is a bubble or not was not part of that rationale. Bubbles can go on for long periods of time. There is no reason to short a market just because you think it might be in a bubble state, that is a sure way to get run over. My bubble comments are just observational, they do not dictate my trading.
I was pleased to see that Larry in his forecast also is forecasting mostly downward prices in the Gold and Silver markets. For those who want those details, go to his site and purchase the forecast. These are great tools to have at your side during the year. It will be the best $200 you will spend. What I would most like to see is for a bounce to occur here and to have my new indicator get into the sell zone. I do worry that this market is so weak now this will not happen. However, if it does, bet the farm on this one to move back down. This is the trade of the year, maybe of many years. As readers know, I think there are a lot of weak hands in this long trade right now. When we reach the point where they realize they have been hoodwinked, it will be one spectacular decline. I hope I am short when that happens.
What I really like about my new indicator is how well it picked the top not being too early. Most of these darn tools always fight trends, and this one seems to pick pretty much the right times to fade them. That Gold top this year was impossible to pick any other way that I know of. I do not have a position in this market right now, but I am looking for a short. This has been an incredible trend that has made a lot of people a ton of money. However this types of moves in commodities do not go on forever. The game is over for now here.
For the stock market, it does appear to me that a sell signal is coming very soon. This total lack of a significant rally at a time when everything that "should" influence stock prices upward, is lined up, is a very negative overhang to me. That mystery chart that I have showed does show down into June, and I think that is about what we are going to see. Larry's forecast shows things a little different, but not too far off. I won't discuss it specifically other than to say when it supports what I am looking at, because it is a great product. He puts a lot of time into this, and I will not compromise it by telling everyone what it says specifically. If we take into account the big picture of all the stock influences we get the following overall view.
The European mess is just being kicked down the road, nothing that is being done over there is doing anything to solve the real problem. Socialism does not work. When you look at China, the worlds savior, and the reason Gold and Gi Joe's and everything else in the world will rally in price, is in reality a house of cards. We also have a bear market in commodities going now, just look at the CRB chart if you are not sure about that.
If we look at China you can see this market has been in a downtrend for 2 years now, hardly what a boom economy should look like. When you read about all the accounting fraud that goes on over there, and you couple that with the shocking stat that about 70% of their GDP is real estate and construction, doesn't that make you wonder how real the "boom" is or more importantly, how long it can last. At the top of our Bubble in Real Estate, I think out percentage was about 40%. That tells us that this bubble is expanded far more than ours was. Jim Chanos is right in his bearishness on China in my opinion. We will see this talk about how China's currency will become the new world reserve currency disappear this year when the dollar soars. What a ridiculous idea that is anyway, I wonder who the pinhead was that started that one? You can say what you want about our problems we have here in the US. When the "sh..." hits the fan, the best safe haven in the world is still the good ole USA.
I also forecast that I will stay on the top of the comments better now that I know what the problem was before. That forecast is likely to be accurate! I also had a few typos get past my editing due to being in a rush a good bit of the time I try and crank these out. I will try to catch all of those next year if possible. I just think it takes away from the professionalism when there are grammatical errors.
I have tried my best to put out a good product here every day and I think I have for the most part accomplished it. There have been times where I have been very accurate and others not so much this year. However, overall I have had a good trading year, and been pretty good about my market calls. That is all I can hope to do.
Enjoy the holidays, more coming tomorrow