Posted Feb 11, 2016 by Martin Armstrong
QUESTION: Marty, at the Conference you said we could conclude this in the first quarter if we get the alignment. It does not look like we will get the alignment since gold is up and the Dow is down. This is why you have been saying this looked like it was postponing into 2017?
ANSWER: Yes. We could have concluded this here in 2016, but the reversals determine the trend. Trend is ALWAYS defined by the Bullish and the Bearish Reversals. Those who expect forecasts to be one-sided opinions are not traders and will typically lose their shirt as 90% of people who try to trade do. A real trader MUST know where he is right and where he is wrong at all times since the market is the only thing that is ever infallible. Those who expect one-sided forecasts never survive. Those who do not grasp why we have Bullish and Bearish Reversals defining the trend claiming that is why we are always right are blind fools. You cannot elect both the Bearish and the Bullish on the same day. These type of people will be separated from their money real fast in the coming slingshot because they are incapable of understanding how markets even move. This is a learning experience and when there is nothing left to learn, it is time to die. So those who are incapable of learning, well I suppose they are just a waste of humanity that drives the rest of us in awe as we watch their stupidity repeat over and over again.
True, 2016 would be five years down from the 2011 high in gold. But because of the split with 2012 being the highest annual closing, this has left the door open to the conclusion being pushed off into 2017. If we got the final low for gold in the first quarter, then a low in the Dow would be the alignment that confidence in government would collapse now. But when the Dow closed year-end lower and gold closed above our number, I stated gold was not as weak as it appeared. It then began electing the Bullish Reversals, not the Bearish, and that gave us the indication we would get a rally BETWEEN the Benchmarks at a very minimum. This was only reinforced by the closing in the euro where we warned the euro should rise to 113 at minimum and 116 optimal. The decline in the dollar should have helped gold, but it will also intensify the deflation in Europe and help to push their banking system over the cliff as is happening right now.
The talk around the street is that the moves are due to a lack of confidence in general that central banks can control the economy. Well, that’s nice, for they never could. But this is looking very dicey, to say the least. That is why we have to just following the reversals and the timing. We have heard every excuse to explain the trend from the stock market following oil to gold rallying because the Fed will not raise rates. Honestly, this all sounds like gibberish.
The markets are preparing for a slingshot move that will make most people’s nose bleeds. Gold has reached so far the 1263 level so there is still room on the upside yet before encountering resistance. The two key numbers to watch now are the 1309 and 1363 levels. Pay attention to the Dow. If we can close below 15875 we have a shot of finally breaking last year’s low.
Also, pay attention to silver. It has not kept pace with gold, showing the bulk of the gold move has been short-covering. Here we need a closing for the week above 1643 to be comparable with gold just above the 1209 number. We also have a Weekly Bullish at 1544. Silver is begrudgingly following which does not speak well for the long-term sustainability here.
So in the end, we will set the stage for all this craziness moving to extremes. Then ask yourself this question? Are you willing to hand your money to government and ask them to hold it for you? If we are concerned about banks, and we are concerned about government, then there is not much life but to move to the private sector. So when rates go negative, a 1% yield in a blue-chip stock looks like heaven. That is the shift on the horizon from public to private. We have to get the weak-minded running into the arms of government before the markets will slaughter them for their stupidity.