On the heels of the big surge in stocks and the pullback in gold and silver, here is a look at the big picture, plus an important note on gold.

Big Picture Extremes, Plus An Important Note On Gold
September 6 (King World News) – 
Jason Goepfert at SentimenTrader:  “In mid-to-late July, Dumb Money Confidence and other aggregate models reached extreme readings and there were strong signs of a split market, which were extremely effective the last two times at preceding weakness in stocks.

Then, after the plunge on August 5, we started to see some more constructive indicators and studies with a medium-term time frame. Most of the time when we’ve seen a spike in volatility like that, the short-term was shaky, with choppy conditions favoring a downside bias. That’s what we’ve seen ever since, and signs are emerging that we hit at least a minor pessimistic extreme and have started to see a recovery. The extreme wasn’t as compelling as some of the other lows in recent years, but it’s getting harder to suggest that we’re about to make another trip down to the lows.

We’ve looked at a lot of different studies and indicators over the past few weeks, most with at least a moderate positive bias over the medium-term. I’m the worst breakout/momentum investor in the world and detest chasing prices, and I do not at all trust traditional price patterns anymore, so it’s highly unusual for me to buy a breakout like we saw this week. Even so, I did add to my exposure. It likely means short-term losses (because I’m a terrible momentum chaser) and is not meant as a trade, but rather it’s based on the improved risk/reward we’ve seen in so many indicators and studies in recent weeks, aided by what looks to finally be more constructive price action.

Gold Undergoing A Long Term Trend Change
I’ve been heavily in cash for a while, and mostly happy with that decision. Stocks have been exceptionally choppy, and the moves in bonds and gold are well beyond what we typically see historically. A good argument could be made that bonds are at/near a historic peak, and gold is perhaps undergoing a major long-term trend change. Both tend to be accompanied by high risk, and I’m not seeing anything there that makes me want to add exposure.”

Jason Geopfert is the best in the world at what he does, providing actionable data. To subscribe to the internationally acclaimed work that Goepfert produces at SentimenTrader CLICK HERE.

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More articles to follow…

In the meantime, other important releases…

Hansen: Important Gold & Silver Update, Plus A Surprise CLICK HERE TO READ

Gold On Target For $1,800, Leverage 2008 vs Today, Bonds, Oil And What Would Be Bad News For The World CLICK HERE TO READ

$1,000 Silver, China’s Banking System Leveraged Nearly 50-1, Plus Look At What Just Hit The Highest Level In 40 Years CLICK HERE TO READ

“Poison” For The Entire Global Financial System Is Spreading CLICK HERE TO READ

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