Gold Has Started A New Bull Market - Mike Swanson (02/19/2016)
I did this interview on the Jim Goddard show on February 18, 2016 about the recent crazy movements in the US stock market that are simply tricking and trapping people.
What we have been seeing are fast captivating stock market rallies that go nowhere and suddenly peak out on people to bring big losses as the market drops again.
Gold did that for years, but now gold is acting differently and is going up for real, because it has started a new bull market.
These are the topics of this interview:
To understand what is really happening in a financial market you have to look at the big picture and not just what a market does in one trading day or what is the news of the hour.
I look at markets by using stage analysis to be able to easily identify the big trend of the market.
There are four stages to a financial market cycle in a stock or entire financial market. As you know you can have a bull market. Before a bull market starts though you usually have a stage one basing phase in which a market simply goes sideways and builds a base.
Then it breaks out and begins a full blown stage two bull market that typically lasts for several years. Then there is a stage three topping phase and then a stage four bear market.
I can quickly show you one important indicator to watch to identify the trend the market is in.
That's the long-term 150-day moving average, which is simply a line plotted on a chart using the average price number of the past 150-days.
In a bull market this line slopes up on a chart and the price of the market tends to stay above it, so it acts as a nice price support level in a bull market to make for a good entry point timing mechanism.
In a bear market this line slopes down on a chart and the price of the market tends to stay below it and it acts as resistance.
In late August of 2015 the S&P 500 and Nasdaq both closed below their 200-day moving averages and then dumped in a panic drop over the course of a few days. They then rallied back to those moving averages in October, but were not able to stay above them as they acted as resistance.
So in January the stock market dumped.
And the S&P is now below those moving averages and those moving averages are turning down as they always do during a stage four bear market.
So the big picture is rallies in the US stock market should not be bought, but should be used to bet against the stock market if you want to make money and to get out if you own lots of positions suffering in the bear market.
Now we saw the stock market this month go down to its lows of January and last Fall and bounce while most individual stocks and the Nasdaq made new lows.
This current bounce is making people get lazy again about the market and think that things are returning to normal again.
It has bounced more than I thought it would (I thought we'd see the S&P 500 end this bounce in the 1880-1990 area and it went a little higher), but when it ends they will lose again.
Meanwhile at the same time money can be made in gold, because gold has started a new bull market this year.
Right now hardly anyone thinks gold is going to go up or thinks about gold at all.
It is invisible to them, because all they think about is the US stock market.
You see most American investors are simply invested 100% in the US stock market and merely pray that it will go up for them.
Right now though to make money in the markets such people need to reduce their risks to owning the US stock market and diversify out of it.
Gold is now key. People need to have money in gold, because it can now make them money going forward.
While the stock market gave a long-term bear market signal by going below it's moving averages for good this January gold blasted through its 150 and 200-day moving average to begin a new bull market.
In bull markets you want to buy dips and pauses in the big bull trend.
So to way to make money buying is to do that with gold and mining stocks right now.
There is a cycle to which mining stocks go up big first and which lag but then go up ever more later.
I talked about that in the above interview too.
Since July I have been pounding the table warning people about a bear market.
I have even harsh things about the US stock market and even the masses of bubble bulls trapped in it saying that they are "hopeless".
I knew most would not listen and such talk even made some angry, but my hope was that a few would listen and escape the stock market trap.
But I did not want people to just save themselves from losses while the insiders dumped, but to be able to actually make changes and make money.
One way is to bet against stocks.
But another way is to actually buy things that are going up or move money into things going up.
Gold represents that.
There are incredible opportunities in the financial markets to make money - people just have to be willing to make changes to take advantage of them.
Sit on random stocks and funds and believe is over.
This is now a market where the people of action make all of the money.
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