Today a legendary short seller warned something is changing as attempts to smash the gold and silver markets are now failing.
“On the subject of the metals, it feels to me like the tenor of the market has changed to some degree. For instance, last Friday we saw the huge line job to the downside, which was quickly rejected, and the market then stabilized…We haven’t evolved to the moment in time where the gold market can sprint higher on a regular basis, but it does seem beneath the surface that, at the margin, there are buyers in waiting — a phenomenon that we have not seen in a while.”
— Bill Fleckenstein
Another Failed Line Job (On Gold)
By Bill Fleckenstein President Of Fleckenstein Capital
August 31 (King World News) – The stock market roared out of the gate, led once again by the Nasdaq, as it gained 0.75% through midday, with the Dow and S&P lagging once again. I have no cogent explanation as to why the market decided to rip higher — not that it matters all that much. In the afternoon, the market chopped sideways to a little higher into the close, with the Nasdaq continuing to be the lead sled dog, up 1%…
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Away from stocks, green paper was mixed, oil gained 2.5%, and fixed income was slightly higher. As for the metals, they were higher after having been lower overnight.
A Test of Character
Yesterday I noted that it seemed to me the character of the metals market had changed, and last night’s and today’s action reaffirmed that opinion. Why do I say that? Last night, early in the evening, there was a quick line job that took spot gold down from around $1,306 to $1,297 and change in a heartbeat, and silver followed a similar trajectory. That was rejected, however, and the market stabilized.
This morning gold was back to unchanged and once it turned green, it took off and ran. Furthermore, gold was not “supposed” to rally early on today because initially the dollar was quite strong before it gave up a decent chunk of its gains. By day’s end, the metals were 1% higher.
Is Time Finally Marching On?
This mornings move was exactly what gold would do when corrections ended during the long bull market, but we haven’t really seen that kind of reaction (i.e., sprinting higher after gold flipped from red to green) to any consistent degree in the last few years. So gold continues to behave in a friskier way than it has for some time, in my opinion, and it does appear that it is no longer Groundhog Day for the metals complex.
As for the miners, they gave a decent — although not extraordinary — account of themselves. While it does seem that folks want to buy them on the dip, no one is chasing them like they do in the land of momentum tech stocks and crypto-trash.
Included below are two questions and answers from the Q&A’s with Bill Fleckenstein.
Question: Hi Bill, do you have a plan for September/October Market crash? If so what’s your game plan? Wait for break and then fed rescue? Or????
Answer from Fleck: “No plan yet, though I have some October puts on INTC and TXN, but nothing in huge size. We need to see some weakness before I get too excited. But let me be clear, I think the market will break, then the Fed will panic, THEN we can see what to do next. The first break will be worth trading, IMO.”
Question: 1) Is a blow-off top underway (Thursday, 8/31/17, 1pm)?
I guess the only way to know is what happens the next couple days.
2) Last night’s attempt to crush gold w/ a $1B dump in the futures (silver futures too had a big dump) failed. Truly fascinating that it failed last night and gold is rallying when stocks are rallying. I guess another data point of strong hands?
Answer from Fleck: “1. Maybe, but I wouldn’t leap to that conclusion just yet. 2. Or, that there are now plenty of buyers who want in on dips.”
***To subscribe to Bill Fleckenstein’s fascinating Daily Thoughts CLICK HERE.
Also, King World News just interviewed billionaire Eric Sprott who discussed skyrocketing silver and much more and you can listen to the remarkable KWN audio interview with billionaire Eric Sprott by CLICKING HERE OR ON THE IMAGE BELOW.
***KWN has now released the remarkable audio interview with whistleblower and London metals trader Andrew Maguire discussing the US propaganda surrounding Fort Knox, an update on the upcoming 250 tonne physical order for gold and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Gold & Silver Prices Surge As This Critical Indicator Approaches An All-Time Record CLICK HERE.
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