Monday, July 24, 2017

Commodity Prices are cheap relative to S&P500 - Inflation starting to show

"We are at a level where commodities are unbelievably inexpensive relative to the S&P 500, levels we have not seen since the peak of equities prices in the dotcom era [and in] 1971 when stock prices were high and commodity prices were very low. The broad commodity indexes have all made their lows, and yet deflation seems to be the talk of the day, rather than inflation."

"One should be a buyer of Commodities and one should tend to be on balance a seller of stocks."

via CNBC

Tuesday, July 18, 2017

Gold has made its Lows and the bear market in Gold has Ended probably

It is reasonably impressive that gold is trading better even as the grains are weak, but perhaps the real strength is because the dollar is generally…weaker and that shall tend on balance to put a bid into gold, all things being otherwise equal.

We are even more impressed that euro-denominated gold is trading to €1075/oz. and is now trading upward through an important intra-day moving average it has not traded upward through since early June.

Monday, July 17, 2017

Bitcoin is comically overpriced

"I love to talk about bitcoin. The only people who believe in it are the millennials. I understand that; they've grown up with this notion of bitcoin. But I find bitcoin to be one of the most ludicrous ideas I’ve ever come across.

Don't get me wrong; the idea behind it―the blockchain technology behind it―is bloody brilliant. The block chain methodology will change the manner in which we trade stocks, bonds, currencies and gold for years into the future. It will change the manner in which trading takes place.

But does bitcoin have any rationality behind it whatsoever? The answer, in my opinion, is no. It’s comically overpriced, comically close to a bubble, and we've seen bitcoin's high. I don't think there's any question that a month and a half ago we saw the high made in bitcoin.

What's amusing to me is that the believers in bitcoin say there's a fixed and finite supply that cannot be increased. Sure, maybe bitcoin supply can't be increased, but there are now over 100 other cryptocurrencies, which effectively increases the supply of cryptocurrencies.

And quite honestly, if you really think that bitcoin, once its last bit has been mined, is not going to reopen for further increases in supply, you're naïve; of course it will.

So has bitcoin supplanted gold at the margin? No question. For the millennials, bitcoin makes sense to them. Gold seems senseless; they don't get it. But the bubble has burst in the bitcoin phenomenon."


Thursday, July 13, 2017

Oil Contango is getting narrower

Dennis Gartman notes the now might be an appropriate time to be cover any short oil positions due to the narrowing of the cantango between WTI and Brent.

"ENERGY PRICES HAVE FALLEN FROM THEIR BEST LEVELS and have done so despite the very bullish numbers on inventories of crude and products reported out yesterday by the EIA. 

However, firstly we have to report that crude oil production in Venezuela continues to dwindle as OPEC reported yesterday that production there has fallen to 1.93 million bpd. This has happened despite the fact that all of the other members of OPEC, in aggregate, produced more crude oil in June than they had in May."

" $2.33/barrel the contango has narrowed for the week, for it was $2.61/barrel one week ago this morning. For that reason, we are going to move to the sidelines in crude oil, covering our short position..."

Dennis Gartman slams cryptocurrencies Bitcoin and Ethereum

“I don’t think there’s any question bitcoin saw its high a month ago and the fact that ethereum had its blow up last week shows you how tenuous are the underpinnings of that market.”

“The reason for bitcoin to have been created was ostensibly to be used as a purchasing mechanism, like dollars; but if something is able to move 15-20% in the course of a day, how can that possibly be used as a purchasing mechanism?” 

“I think it’s the most comical, ludicrous, and silly notion to come down the pipe since tulip bulb mania of the 15th century.”

via kitco

Tuesday, July 11, 2017

Gold might still rally slowly

Crude Oil
"Given the fact that crude has been under some very real pressure over the last month or so, you have to be reasonably impressed that gold has, at least, held its own."

Gold vs Oil
"I hesitate to say there’s any great short-term correlation between the two. On balance, gold whether it is in dollar, euro or yen terms, I think gold wants to move quietly higher."

Gold's price resilience in 2017
“The psychology is overwhelmingly bearish and yet prices are not making new lows, that is worthy of note."

via kitco

Wednesday, July 5, 2017

Sell the Crude Oil rally

Should you buy or sell crude oil. Here is what Dennis Gartman thinks....

"CRUDE OIL PRICES CONTINUE TO ADVANCE and have now risen for 8 or 9 days in a row, depending upon when one has marked the close. 

We have maintained that the “bounce” would take crude back to The Box marking the 50-62% retracement in nearby WTI crude to somewhere between $47.00-$48.15 and for all intents that was satisfied yesterday when the high of $47.07. 

The time then has come to be short of crude oil once again, and we are certain that we shall be at least as equally scoffed at for selling crude today as we were two weeks ago for urging everyone, everywhere not to be short. This recent increase has, of course, re-ignited the interest of drillers to drill and the contango is still wide enough to encourage drilling and hedging as the one year forward is very nearly $50/barrel."

via zerohedge