Correlation: Margin Lending Vs. Stock Valuation

I came across an interesting correlation: Margin Lending Vs. S&P.Margin loans are programs that allow investors to borrow money to buy equities. So if you think through it: the higher the margin balance in the market, the higher the S&P will go, because people will have more borrowed money to put in the stock market. Today, the total margin balance is at $350 billion for NYSE member firms.The evidence is presented on Chart 1. You can see...

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Update: Beleggerscompetitie

On the Belgian Investors Competition, I'm still standing on last place with my dreaded declining gold and gold mining stocks. But let's take a look at the top 10.It looks like Diddenboyke has held his position rather nicely.1) tompau: long stocks, France Telecom, Air Liquide2) pmanager: ING, long stocks3) Diddenboyke: short gold, Barco, Adidas, Total, GDF Suez4) DRACHE: Barco, Heineken, long stocks5) Maarten Janssens: short stocks, Bekaert6) Freak of Nature: short gold7) Yamayoze: Gold Fields, Umicore, long stocks, Commerzbank8) Bouchez: Gold Fields,...

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Update: Precious Metals Premiums

Just wanted to give a status update on the premiums.The trend in premiums is still in an upward phase. A little side note, the bitcoin price has skyrocketed and continues to do so.Chart 1: Silver Premium First Majestic Silver Bullion PremiumChart 2: APMEX Silver PremiumChart 3: Shanghai to London Silver PremiumChart 4: Shanghai to London Gold Prem...

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The Leverage in COMEX Silver is about to Explode

Why is the eligible silver going up at such high pace and open interest going up at the same time?As I told people before, eligible silver is not allocated. People think they own it, but it is not available for delivery. The ratio of registered to eligible is now: 29.7%. Down from 33% the last time I looked.As this ratio between registered and eligible goes down, the leverage is going up and up. And when this leverage breaks (due to a short...

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Correlation: The Dow Theory

Peter Schiff's Radio Show has reminded me that there is a correlation in the Dow Transports Vs. Dow Industrials.He said in the 26 February 2013 radio show that when the Dow Transports doesn't go up together with the Dow Industrials, then it is likely that the Dow Industrials will go down. That's the Dow Theory.The definition of the Dow Theory goes like this:In Dow's time, the US was a growing industrial power. The US had population centers but factories...

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Correlation: EPS revisions Vs. S&P

This is a fun correlation. By just looking at the EPS revisions (which is still negative), you can see that the stock market has outrun its pace and is due for a correction.Chart 1: EPS revisions Vs. S&am...

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Record High Insider Selling Marks The Top In The Stock Market

There are several indicators today, marking a major top in the stock market. One of those indicators is the overvaluation in the stock market according to the "Warren Buffett Valuation" of the total U.S. stock market index as compared to U.S. GNP. We found out that stock markets are overvalued today, because the total U.S. stock market index is at 100% of  U.S. GNP. Normally we see that the total U.S. stock market index is at 80% of GNP. We...

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100% Chance of a Major Low in Gold Miners

I don't know if you have noticed this, but sentiment on the gold miners is at a record low on a 3 year period (because the free chart only goes for 3 years...)Each time when we see a bottom in sentiment, the gold miners are bottoming out.I believe the best place to go right now is in gold mining stocks and I'll put the money where my mouth is, especially when Goldman Sachs tells you to sell your gold.Some suggestions: ASM, EXK, NEM.Chart 1: Gold...

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John Mauldin Vs. Peter Schiff

John Mauldin Vs. Peter Schiff = To Print or Not To Pr...

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Update on Shanghai Precious Metals Premium

Just a little update for those who think precious metals demand is going down.As you can see, Asians want to pay a premium for precious metals. The west is selling gold, the east is buying gold...Chart 1: Shanghai to London Gold PremiumChart 2: Shanghai to London Silver Prem...

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Beleggerscompetitie: Update

It's a pretty embarrassing accomplishment for anyone to be almost last place in a competition, namely 22698th. It's all attributed to the decline in precious metals.All of the top 10, except Nass, have lost their position, because they were long gold.Here is the new list of top 10:1) Diddenboyke: Short Gold, Adidas, GDF Suez, Total, Umicore2) BOSSIE BAS: Short Gold, Credit Agricole, KBC, Nyrstar3) Fanskb: Short Gold, BNP Paribas, Nyrstar, AXA4) Remi261: Short Gold, Long Banks5) tbourrie: Long Gold, China, Russia, ArcelorMittal, Ageas6) DINAMO7626:...

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Huge Divergence Between Bitcoin and Gold Price

How can the bitcoin chart (Chart 1) keep going up, while the gold chart goes down (Chart 2)? Apparently it can, but not for long, that is my take.Chart 1: Bitcoin ChartChart 2: Gold PricePremiums on Shanghai are hitting new highs so stress is building up:Chart 3: Silver Premium Shanghai/LondonAnd U.S. Mint silver sales are hitting a record for this part of Februa...

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Total Gold Stock at COMEX hits new low

As predicted here, the total gold stock plunged to the lowest stock level since I monitored the COMEX, namely: 10676012 troy ounces.This was of course obvious when J.P. Morgan swapped eligible gold into registered gold a few weeks ago. Total stock at J.P. Morgan vault hit a low of under 2 million troy ounces.(Probably Soros is selling his GLD and now taking delivery...)Chart 1: Gold COMEXOn the silver front we still see a huge increase in stock...

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Update: Copper Contango Experiment

There is no stopping of the increase in contango in copper. So don't expect a correction in copper price soon. Probably the stock market can still go up for a little bit, due to this expansion of the balance sheet of the Federal Reserve.Chart 1: Copper Conta...

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Brent Vs. Crude Divergence

If you hadn't noticed, Brent and WTI crude oil were pretty correlated historically, but since 2011 something weird happened.Brent crude oil started to move up, while WTI crude oil was flat (Chart 1). This is mainly caused by the increased oil supply in North Dakota due to the applied technique called "fracking". This increased oil supply drove down the WTI crude oil price, while Brent crude oil (tied to the Gulf Coast) has increased.Chart 1: Brent...

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China Ups U.S. Bond Holdings

Surprisingly, China bought even more U.S. bonds and is now again the champion, just before Japan. Almost every foreign country increased its U.S. bond holdings in December 2012.And now realize they are making a loss on that purchase as yields went up.Chart 1: China U.S. Treasury Holdi...

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Shanghai Silver Premium Rising

There is a lot of hope that Asia, when it opened this week after the lunar holiday, would normalize the precious metals market. And indeed, my chart tells me the demand is there.Premiums on silver between Shanghai and London keep rising (Chart 1).So, stay tuned for tomorrow!Chart 1: Silver Premium Shanghai / Lon...

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Update: List of Discovered Correlations

Once in a while I need to post an update on all discovered correlations.Positive correlations mean that if one goes up, the other goes up too. Negative correlations mean that if one goes up, the other goes down.Positive correlations:1) Silver premium Vs. Silver Price 2) Baltic Dry Vs. Industrial Commodities3) Baltic Dry Vs. Copper4) Copper Vs. S&P5) Oil Vs. Dow Jones6) Agriculture Price Vs. Health of Economy7) Agriculture Vs. Fertilizer Price 8) CRB Index Vs. Commodity prices (oil, agriculture, metals)9) MZM...

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Correlation: Total Stock Market Index Vs. GDP: How to Value Dow Jones

Today I learned about the Warren Buffet valuation of the stock market by looking at the total stock market index and GNP numbers (which is almost equal to GDP numbers + $200 billion).The total stock market index can be found here and stands at $15.879 trillion on 15 February 2013 (Chart 1). It measures the market cap of the U.S. companies. Don't confuse this chart with the Dow Jones chart.Chart 1: Dow Jones U.S. Total Stock Market IndexNow you...

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Tightness Continues in the Precious Metals Market

There are several indicators of a tight gold market right now and I want to show you this in the following analysis. I will talk about the GOFO rate, premiums, supply and demand, CFTC report.Investors shouldn't worry about the gold price declining, this is a healthy consolidation phase we are entering in now. Of course, we hear about George Soros lightening up his gold positions, Jim Rogers starting to hedge the gold price and Dennis Gartman shorting gold, but I see that more as a contrarian indicator. In the long term, fundamentals will win the...

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The Federal Reserve Debt Limit

This is just too funny not to sha...

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Gold Supply and Demand

As I predicted here, the gold supply is declining by 1.4% in 2012 due to lower recycling. On the other hand, the gold demand from central banks soared.It is odd that the gold price hasn't reacted on this yet.The downward action this week in gold has much to do with the 1 week holiday in China. Fundamentals for gold look very good to me, at least on the demand supply side.On a side note, APMEX silver premiums have gone to a new high of 16.5%....

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Beleggerscompetitie: Update

We are one week further in the investors competition and I already dropped to position 20000 with my emerging market stocks and turbo gold which is dropping. You can follow me at "katchum", but following my positions seems not to be a good idea lately...A lot of the investors from the previous week have dropped out of the top 10 too with the exception of VanLooy, Fidelski and Houtten.1) Nass: Credit Agricole, Harmony, Infineon2) VanLooy: Ageas, Commerzbank, gold, ING3) gdelabassee: banks, Harmony, Inbev, Siemens, gold4) Houtten: long stocks, Belgacom,...

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Gold cannot be suppressed for long

Have you seen the bitcoin chart recently?http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zvHave you seen the lease rate chart recently?http://www.kitco.com/lease.chart.htmlHave you seen the commercial short chart recently?http://snalaska.com/cot/current/charts/GC.pngHave you seen the China gold import chart recently?http://seekingalpha.com/instablog/839735-katchum/1522571-december-2012-china-gold-imports-from-hong-kong-hit-record-highHave you seen the M1 chart recently?http://research.stlouisfed.org/fred2/series/M1=> Gold will not be...

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Avino Silver and Gold Mines: The Perfect Growth Story

Avino silver and gold mines (ASM) is one of those miners that has long existed in Mexico and has a proven track record of 27 years. It closed in 2001 due to low metal prices but reopened in 2010 and is continuing to grow production as we speak. One of the most important aspects to take into account is the presence of a long existing infrastructure, including a mill with a replacement value of $40 million. This mill is fully operational now at 250...

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Belgium Restricts Gold Buying

There is a proposal in the parliament of the kingdom of Belgium to make buying gold with cash illegal above 5000 euro. All transactions above 5000 euro in gold should be made electronically (so the government can trace you).This is of course a first step to make gold illegal and to confiscate your physical gold holdings. It is an attack on our privacy and I don't approve it. The more debt and the more government in a certain country, the higher the chance of repression by that government.Of course there is an option out. I'll just buy my gold in...

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Investors Competition Belgium

In Belgium we have the yearly investors competition called: "Beleggerscompetitie". Of course I'm participating too as "katchum". You can search me if you want and view my "virtual' holdings. My standing is currently at position 8752 of 19000 so I'm above average... I'm currently in emerging markets, China, Russia, gold, agriculture, oil and base metals.Not that I'm a good trader, but what's interesting about this competition is that you can view the holdings of everyone, including the top 10. And you can win a car (Ford).I will list the top 10...

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December 2012 China Gold Imports Hit Record Level

As predicted here, China bought gold like there was no tomorrow in December 2012 as gold prices fell to a record low. They bought 114.4 tonnes. I believe January will be a good month too.Chart 1: China Gold Imports from Hong KongNet imports were 84.7 tonnes. That's 84.7/114.4 = 74%. That's a record high, even higher than the 68% in November 2012. This means China isn't even trying to export its gold to Hong Kong anymore. It's scooping up all the...

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Eligible Silver Spiking Upwards

Something must be wrong here. Why is eligible silver rising at such a high pace, while registered silver doesn't budge? This trend can't last...Is it because shorts can't get out?Chart 1: COMEX Silver StockIf we look at the premiums on APMEX, we get this. 12% and 16%, which are pretty high premiums lately.Chart 2: APMEX 100+ silver coin premiumChart 3: APMEX 1-19 silver coin prem...

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Contango Report Update

As predicted two months ago, the copper price has made a huge move upwards to $3.75/lb (Chart 1). Investors are worrying though, as the U.S. dollar is now strengthening again while stock prices decline. But I assure you that as long as the contango in copper doesn't fall down, the copper price will keep increasing. I will bet my copper contango theory on it. So don't count out the rise in stock prices just yet.Chart 1: Copper PriceAs a matter of...

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How to Monitor the Gold and Silver Premium Between Shanghai and London

He who searches, will find what he's searching for (or something like that).In a previous post here, I noticed that the silver prices between Shanghai and London were decoupling, with premiums as high as 10%. I didn't know where to find this Shanghai Exchange silver price.But today I think I found the site that gives these gold and silver prices (for free).You can find it on Bloomberg: http://www.bloomberg.com/quote/SHGFAUTD:INDhttp://www.bloomberg.com/quote/SHGFAGTD:INDAnd when Bloomberg restricts access to their site, you can find it here: http://www.sge.sh/publish/sgeen/sge_price/sge_price_daily/9550.htmGold...

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Sprott Physical Platinum and Palladium Trust Goes Negative

A very rare sight, physical platinum and palladium now has a negative premium in the Sprott trust. So you can buy platinum and palladium at a discount! This could indicate to a future drop in platinum and palladium.I was very bullish on platinum before, but today the platinum to gold ratio has gone up tremendously from 0.85 to 1.03. I think it's time to take some profits.Chart 1: Sprott Physical Platinum and Palladium Trust Prem...

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Correlation: Gold Volatility Vs. Gold Price

When I see the current volatility in the gold market, one day it's up 1% and the next day it drops 1%, then I'm wondering if it was like this historically too.So I took the historic gold price and looked at the percentage changes (Chart 1). If you think of it deeply, you could say that when the volatility increases, the gold price should increase too because higher absolute changes in gold price indicate that this volatility can only decline if you...

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