King World News will be interviewing London whistleblower and metals trader Andrew Maguire on Friday. In the meantime…
By Bill Fleckenstein President Of Fleckenstein Capital
July 5 (King World News) – Monday’s holiday stock market activity was interesting in that the first day of the quarter started off with a ramp to the upside, but then reversed, with particularly poor action in the FANG and chip stocks, as well as a big decline in Tesla’s stock price…
To hear which legend just spoke with KWN about $8,000 gold and the coming mania in the
gold, silver, and mining shares markets CLICK HERE OR ON THE IMAGE BELOW.
Bulls Cull the Herd of TSLA
Today, however, the bulls tried to “undo” Monday, as those very same momentum favorites led the charge higher (the Nasdaq added 0.75%), with the exception of TSLA, which was clobbered again.
Away from stocks, green paper was quiet, although it was all the rage on Monday. Oil lost 5%, fixed income was slightly higher (after being smacked on Monday), and the metals were mixed with small changes (though they were hit hard on Monday as well).
Gold stocks have slightly resisted the recent decline, although I say that grading on the curve because they haven’t acted as badly as they might have. And that is a distinction that hasn’t made much difference thus far.
Opposites Don’t Always Attract
In terms of what happens next, from a sentiment standpoint, the gold complex can’t get a whole heck of a lot worse, but in and of itself that won’t drive prices higher even though they could be done declining in any significant way.
Included below are four questions and answers from the Q&A’s with Bill Fleckenstein.
Is Illinois The Next Bear Stearns?
Question: Fleck, I’ve been reading a lot about Illinois. Could that be the Bear Sterns of the next crisis, which is the realization and acknowledgement that off balance sheet liabilities for govt’s on all levels are trillions of dollars and unfunded – and a looming disaster unless the Fed steps in and prints money so all can get paid back in devalued dollars?
Answer from Fleck: “You’re correct about a looming funding crisis. How it plays out exactly we will just have to see.”
Question: Fleck, I’ve read a few different articles about China working with some of the Arab states to potentially have the price of a barrel of oil pegged to gold. My question is, if such a scenario were in fact to come about, would it be bullish for gold or have no real effect? Thank you as always.
Answer from Fleck: “I doubt it will happen, but if it did it would increase demand, thus being supportive of the price.”
Question: Hey Bill, To me its incredible the market is at all time highs despite their being so much uncertainty surrounding tax reform, the fed, trade wars etc. All the good news is priced in and markets are on historically high PE s and none of the bad news is priced in. As a fun question…. what % chance do you put on the market being lower than it is now in 12 months time? Thanks
Answer from Fleck: “Obviously I am guessing, but I would say 100%, though that doesn’t mean much. I wouldn’t put money up on that thought, yet.”
Gold Market On The Verge Of A Big Rally
Question: Hi Bill, I feel like it may be time to reduce my exposure to precious metals shares. Please let your readers know if you are currently cutting back on the precious metals shares, and what percentage of your full weighting of precious metals shares you intend to hold in the coming weeks. Many thanks for your good work
Answer from Fleck: “As I have written, I feel the market is on the verge of a big rally, so I’m not in your camp, and thus I have no plans to cut back. In fact, I’m looking for the right setup to add some calls. However, if you feel as you do then you should act, as everyone needs to manage their own risk and psychology. You should never do something just because someone is doing it, you must make your own decisions. And obviously you will need a plan of attack should your trading decision turn out to be incorrect.”
***To subscribe to Bill Fleckenstein’s fascinating Daily Thoughts CLICK HERE.
***To listen to one of the greatest interviews ever with Dr. Paul Craig Roberts, where he discusses the smash in the gold market, global chaos and much more, CLICK HERE OR ON THE IMAGE BELOW.
***KWN has also just released the remarkable bonus 4th of July audio interview with legend Art Cashin and you can listen to it by CLICKING HERE OR BELOW.
***ALSO JUST RELEASED: Major Update As Gold Bulls Attempt To Halt Recent Decline CLICK HERE.
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