LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines to Launch New Website

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA


GoldSeek Web

Dumb Money Sold in May and Went Away

-- Posted Tuesday, 22 May 2012 | | Disqus

By Gary Tanashian


Led by near suicidal sentiment among the gold 'community', the broad markets recently embarked on a southerly course as well, culminating with 'dumb money' sentiment at very bearish levels in technology, energy, financials, industrials and on out to commodities. 

Aggregate 'smart/dumb' confidence courtesy

The last time sentiment was in such a compelling (contrarian) bullish structure was after the damage inflicted upon markets by last summer's acute phase of the euro crisis.  Here I will interject that I subscribe to to give NFTRH a real time edge on the market's sentiment structure and highly recommend their service.

It is important to realize that when commodities like crude oil and copper are weak the last thing on the public's collective mind is inflation.  That is just the way that powerful entities - entities that have been roundly criticized for their chronic inflationary policies - want it in order to promote the next inflation.  In other words, the public is finally shutting up about austerity and gas prices.

The red arrow on the monthly chart of the 30 year Treasury yield indicates the last time that the public was highly alarmed about inflation.  The terminal moment was when the 'bond king' himself, Bill Gross, was widely publicized to have gone short the 30 year (or long this yield).  He called the top in interest rates and in inflationary hysterics.

Now, aided by Federal Reserve buying of the bond, we have come to the opposite state, with deflationary fears in the air and anxiety at a maximum.  The stage is set.

It is a US presidential election year after all.  A Democrat reelection year at that.

Here is the seasonal pattern for the S&P 500 during Democrat reelection years courtesy of McClellan Financial, a market intelligence service to which I have recently subscribed to give NFTRH another edge in its own market management.  The graph was generated as the SPX was beginning its hard down of the last week or so. 

If the pattern holds true in 2012, it will blend nicely with NFTRH's ongoing theme of 'i2k12' (inflationary 2012), which would be born of a deflationary phase like the one that threatens to come to the fore today. 

Think about the election year pattern, think about how wildly bearish sentiment has become, think about the market's need to shake out the dumb money prior to rising and most of all think about how policy makers need to be perceived as doers of good; as part of a solution, as opposed to chronic purveyors of an inflationary regime that has been in force most intensely since 2000.

The S&P 500 has not yet declined quite to the level anticipated by this chart from NFTRH, which we have been using to gauge first a loss of important support at 1360 and then, anticipated major support (the black highlighted zone shows the range) that would be the base from which 'i2k12' could get going. 

I am not personally interested in buying  the S&P 500, but am watching emerging markets, emerging market 'income' funds, big US technology and energy for possible positioning now that NFTRH is fully stocked in the gold sector.

There are no guarantees in highly gamed markets dependent upon being spoon fed by policy makers who continually play a game of trying to fool the public.  But if the election year pattern holds true and if the Fed so chooses to exercise a renewed imperative to inflate from a public that no longer sees inflation as its primary fear, the second half of 2012 could be largely bullish... for the markets and for the president's reelection chances.

-- Posted Tuesday, 22 May 2012 | Digg This Article | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


The views contained here may not represent the views of, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.