And we have new lows this week. Total gold stock goes to 6989165 troy ounces.
Showing posts with label stock. Show all posts
Showing posts with label stock. Show all posts
Friday, 19 July 2013
Sunday, 2 June 2013
The GDP numbers came out this week and there was 2.4% growth yoy:
http://www.reuters.com/article/2013/05/30/us-usa-economy-idUSBRE94T0HI20130530
So what does this mean to your equity positioning?
The following chart is used to give a valuation on the stock market and gives you the tool to position yourself. It is based on the total stock index (DWCF) divided by the GNP.
http://www.reuters.com/article/2013/05/30/us-usa-economy-idUSBRE94T0HI20130530
So what does this mean to your equity positioning?
The following chart is used to give a valuation on the stock market and gives you the tool to position yourself. It is based on the total stock index (DWCF) divided by the GNP.
 |
| Table 1: GDP and GNP |
Now divide 17015 by 16236 and we get: 1.05.
105% is modestly overvalued according to the Stock Valuation Table.
 |
| Stock Valuation Table |
Thursday, 25 April 2013
Today we see a quite alarming drop in the COMEX gold stock. Do you see how the total gold stock (green chart) is plunging? Do you see how the registered gold (blue chart) is disappearing?
I know the COMEX can't default, but we will see cash settlements for gold deliveries like never before. If we see the trend going further down at this rate, you won't get your physical gold, I can assure you that.
Silver open interest is still rising with higher stock. I don't expect a reversal yet in the silver price down trend, but I see signs of a topping out.
Thursday, 18 April 2013
Tekoa Da Silva notices, just like me here, that COMEX gold stock is declining rapidly lately.
We don't know what it means, but one of the theories is the COMEX default. Which is what happens when the downtrend keeps going on like this.
 |
| Chart 1: Comex Gold |
As I forecasted here, we now see the money aggregates go up again after a slow start in 2013 (Chart 1), which also means that money velocity will go down. So you can expect that U.S. treasury yields will go down as GDP is likely to go down too with the declining PMI.
As U.S. treasury yields go down, we have a perfect environment for gold to reverse its downtrend considering the negative real interest rates.
Sunday, 14 April 2013
The following chart is used to give a valuation on the stock market and gives you the tool (aka Warren Buffet Rule) to position yourself. It is based on the total stock index (DWCF) divided by the GNP.
|
| Stock Valuation Table |
Tuesday, 26 February 2013
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 just recently had news that U.S. GDP was negative and I wrote about it here. When GDP declines, it inherently means that the stock market must decline, taking into account the Warren Buffett Valuation theory.
Investors are much too bullish on stocks at this moment and we can see that in the Dow-Gold ratio, which is hitting a ratio of 9 to 1 as we speak.
I believe though, we shouldn't be so complacent about stocks. After all, the P/E ratio of the Dow Industrials stands at 15.3 right now, while in the 70's, the P/E ratio was on average at 10, which is much lower than 15.3. The question is: "Do we expect higher or lower earnings in the future?". I believe the earnings are going to get worse in the future. One way to measure this is to look at the Citigroup Economic Surprise Index (CESI). This index is defined as weighted historical standard deviations of data “surprises”. In human language it means that if the index turns negative, the chance of an "unexpected" downward revision goes up. You will hear more bad news out of the media. And what do you know, the CESI did turn negative in the previous month. So you can expect more bad news coming. Historically, when the CESI goes down, the stock market goes down a few months later as you can see on chart 1.
To read more evidence on a top in equities, go here.
Investors are much too bullish on stocks at this moment and we can see that in the Dow-Gold ratio, which is hitting a ratio of 9 to 1 as we speak.
I believe though, we shouldn't be so complacent about stocks. After all, the P/E ratio of the Dow Industrials stands at 15.3 right now, while in the 70's, the P/E ratio was on average at 10, which is much lower than 15.3. The question is: "Do we expect higher or lower earnings in the future?". I believe the earnings are going to get worse in the future. One way to measure this is to look at the Citigroup Economic Surprise Index (CESI). This index is defined as weighted historical standard deviations of data “surprises”. In human language it means that if the index turns negative, the chance of an "unexpected" downward revision goes up. You will hear more bad news out of the media. And what do you know, the CESI did turn negative in the previous month. So you can expect more bad news coming. Historically, when the CESI goes down, the stock market goes down a few months later as you can see on chart 1.
 |
| Chart 1: Citigroup Surprise Index Vs. S&P |
Tuesday, 19 February 2013
As predicted here, the total gold stock plunged to the lowest stock level since I monitored the COMEX, namely: 10676012 troy ounces.
It's surprising to see this huge divergence between silver and gold. I don't know what it means...
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 COMEX |
On the silver front we still see a huge increase in stock (and therefore also increase in open interest) (Chart 2).
 |
| Chart 2: Silver COMEX |
Saturday, 16 February 2013
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.
Now you compare that to the U.S. GDP number, which can be found here (Chart 2).
If you then divide Chart 1 by Chart 2, you get Chart 3. If the chart goes above 100%, then the stock market is overvalued.
Here is the table for valuation:
For example, in December 2007, the GDP was $14.25 trillion, while the total market cap was $15 trillion. 15/14.25 = 105%. Meaning overvalued.
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 Index |
Now you compare that to the U.S. GDP number, which can be found here (Chart 2).
 |
| Chart 2: U.S. GDP |
 |
| Chart 3: Market Value to GNP ratio |
 |
| Chart 4: Valuation Table |
For example, in December 2007, the GDP was $14.25 trillion, while the total market cap was $15 trillion. 15/14.25 = 105%. Meaning overvalued.
For example, in December 2008, the GDP was $14.08 trillion, while the total market cap was $8.78 trillion.
8.78/14.08 = 62%. Meaning severely undervalued.
So today, you could say that stocks are becoming overvalued, so you should take some of your money out of the stock market while you still can.
There is a final note I want to make. If this correlation is true between the Total Stock Market Index and GDP, then you have to take in mind that GDP is very important to watch. If the GDP drops, then the stock market will most likely drop. If the GDP rises, then the stock market will most likely rise.
I pointed out many times that U.S. GDP will not go up, due to the zero hour debt problem, which I talked about here. So theoretically, the stock market cannot rise.
The only way to get GDP go up again is when debt is significantly reduced and we're not at that point yet.
8.78/14.08 = 62%. Meaning severely undervalued.
So today, you could say that stocks are becoming overvalued, so you should take some of your money out of the stock market while you still can.
There is a final note I want to make. If this correlation is true between the Total Stock Market Index and GDP, then you have to take in mind that GDP is very important to watch. If the GDP drops, then the stock market will most likely drop. If the GDP rises, then the stock market will most likely rise.
I pointed out many times that U.S. GDP will not go up, due to the zero hour debt problem, which I talked about here. So theoretically, the stock market cannot rise.
The only way to get GDP go up again is when debt is significantly reduced and we're not at that point yet.
Thursday, 31 January 2013
I couldn't believe my eyes when I saw this. Suddenly we saw the J.P. Morgan vault get almost half of the eligible gold converted into registered gold.
I have seen this before... I think someone wants delivery. Let me do some research on this...
Edit: Yes indeed, we saw J.P. Morgan do the same with silver a year ago here in November 2011 (right before a huge rise in silver price). The consensus was that they are preparing for a large delivery to someone. They increased registered stock to prevent a COMEX default. This is also a sign of loss of confidence in paper gold and silver.
Let's see what happens next, probably a decline in total stock.
Edit: Yes indeed, we saw J.P. Morgan do the same with silver a year ago here in November 2011 (right before a huge rise in silver price). The consensus was that they are preparing for a large delivery to someone. They increased registered stock to prevent a COMEX default. This is also a sign of loss of confidence in paper gold and silver.
Let's see what happens next, probably a decline in total stock.
Tuesday, 18 December 2012
Just a few days ago, I reported that J.P. Morgan vault had a significant amount of eligible gold taken away. I didn't know what it meant.
Today, another 175000 eligible gold was taken away, this time by HSBC and J.P. Morgan, who are seen to be the main manipulators in the precious metals market.
This is all nice to report, but I still don't know what it physically means.
But let's try to understand the CFTC market and COT data.
But let's try to understand the CFTC market and COT data.
First off, when open interest increases in gold (Chart 2), it means that inventory needs to be replenished. Analogy: if you get increasing orders (higher open interest), you should have a higher stock level to meet demand.
So if open interest increases on Chart 2, registered bullion stock levels should go up too on Chart 1. We can see that Chart 1 and Chart 2 correlate very well. Also, Chart 3 and Chart 4 correlate very well too.
Gold:
 |
| Chart 1: Gold COMEX Stock |
 |
| Chart 2: Open Interest Gold |
 |
| Chart 3: Silver COMEX Stock |
 |
| Chart 4: Open Interest Silver |
So actually it's very handy to monitor the COMEX stock levels and compare it to the open interest chart of the CFTC.
Friday, 14 December 2012
I don't know what it means, but yesterday we saw the largest drop in total and eligible gold in about a year time. 322000 troy ounces of gold were taken away. That's 11,4% of all JP Morgan gold stock.
 |
| Chart 1: COMEX gold |
Wednesday, 28 November 2012
Wednesday, 21 November 2012
Another nice data point. I reported a while ago that 3.6 million troy ounces were taken out of COMEX.
On the other hand, nothing special to report at the gold stock (Chart 2).
Now, a month later we see another 1 million troy ounces taken out from Scotia Mocatta depository.
It is getting more and more interesting... why are they pulling out their physical silver I wonder (Chart 1).
 |
| Chart 1: Silver Stock COMEX |
 |
| Chart 2: Gold Stock COMEX |
Saturday, 18 August 2012
Just a few weeks after I turned bullish on silver, articles are sprouting out of nowhere about silver inventories being historically low.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/17_Expect_Major_Silver_Price_Spike_As_COMEX_Inventories_Decline.html
However, I see signs of a temporary weakness in silver.
1) The silver stocks at the CME aren't actually going down anymore. They are going upwards (Chart 1).
2) The silver lease rates are actually going down, instead of going up. Historically, when silver lease rates plunge, the price of silver will go down a few months later.
Conclusion: I would be wary about the price of silver. If this trend continues this way, look out below!
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/17_Expect_Major_Silver_Price_Spike_As_COMEX_Inventories_Decline.html
However, I see signs of a temporary weakness in silver.
1) The silver stocks at the CME aren't actually going down anymore. They are going upwards (Chart 1).
 |
| Chart 1: Silver Stocks CME |
 |
| Chart 2: Silver Lease Rate |
Thursday, 26 July 2012
As I predicted before, silver is having a breakout these days. And the evidence is piling up. One of the evidences of a bullish scenario is the silver stock at the CME.
As you can see on chart 1, the silver stock at the CME is declining, ever since Eric Sprott did his PSLV offering of $US 200 million on the market on 12 July 2012. I predict that registered silver will start to decline soon (blue dots).
Once the silver price breaks the $US 30/ounce level, it's off to the races.
 |
| Chart 1: Silver stock at CME |
Friday, 22 June 2012
Time for a gold and silver stock update at the COMEX.
In a previous article I noted that silver stocks were historically low. But recently silver stocks have been rising at the CME, which isn't bullish for the silver price. It means that silver isn't being used as much as a month ago, indicating a slowdown in the economy (Chart 1). Silver has been stocked up in the warehouses.
As for the gold stock, the total amount of stock at the COMEX has been flat for a month now (Chart 2). If we compare gold stocks against silver stocks, this means that gold is doing much better than silver in strength.
Notable is the little spike in registered silver on Chart 1 in the beginning of May, and the little spike in registered gold on Chart 2 in the beginning of June.
 |
| Chart 1: CME/COMEX silver stock (Troy ounces) (red eligible, blue registered, green total) |
As for the gold stock, the total amount of stock at the COMEX has been flat for a month now (Chart 2). If we compare gold stocks against silver stocks, this means that gold is doing much better than silver in strength.
 |
| Chart 2: CME/COMEX gold stock (Troy ounces) (red eligible, blue registered, green total) |
Thursday, 19 April 2012
According to the CME, silver stocks at warehouses hit a 10 year high this week. This seems to be bad news for silver investors, but I will present a different picture on this. Brother John pointed out already that stockpiles are at record lows in one of his silver updates and I'll present a more detailed analysis about this in the following article: CME Silver Stocks at an all time high, or are they?.
From Zerohedge:
For those who aren’t familiar with the terminology, the registered category of COMEX warehouse bullion stocks generally refers to gold and silver bars against which COMEX warehouse receipts are outstanding. The COMEX publishes these stocks on a daily basis and they can be found here: Silver | Gold. The registered category is the total pool of gold and silver available at any time to meet delivery requirements under expiring futures contracts or to establish initial futures contract positions through a transaction called exchange-for-physicals (I’ll explain this another time). It is important to realize, however, that many parties holding COMEX gold and silver in registered form have no intention of making their holdings available for delivery. By this I mean that such parties are neither (1) holding a short futures position against the warehouse receipt nor (2) willing to sell their registered metal (warehouse receipts) to a party with a short futures position. Indeed, a substantial portion of those holding registered metal would have acquired the COMEX warehouse receipts by holding long futures positions for delivery. In other words, these registered stocks are held for investment and not for commercial purposes.
In comparison, the eligible category of COMEX warehouse bullion stocks generally refers to bullion held in the warehouses that meets the specifications of an acceptable COMEX bar (proper weight, size, purity and refiner) but does not have a COMEX warehouse receipt issued against it. For example, an investor might purchase several 1,000 oz. bars of silver from a dealer and then deliver the bars for allocated storage at a COMEX warehouse. This is a private arrangement and has nothing to do with the COMEX. Unless these bars are officially registered (the easiest way to do this is through the aforementioned exchange-for-physicals), they will remain in the eligible category until withdrawn from the warehouse by the investor. Thus, the appropriate way to treat eligible COMEX warehouse bullion stocks is that they represent metal that could potentially be registered at some point in the future but cannot presently be used to make delivery under a short futures contract.
Note that Zerohedge says: Eligible silver has NOTHING to do with COMEX!
From Zerohedge:
For those who aren’t familiar with the terminology, the registered category of COMEX warehouse bullion stocks generally refers to gold and silver bars against which COMEX warehouse receipts are outstanding. The COMEX publishes these stocks on a daily basis and they can be found here: Silver | Gold. The registered category is the total pool of gold and silver available at any time to meet delivery requirements under expiring futures contracts or to establish initial futures contract positions through a transaction called exchange-for-physicals (I’ll explain this another time). It is important to realize, however, that many parties holding COMEX gold and silver in registered form have no intention of making their holdings available for delivery. By this I mean that such parties are neither (1) holding a short futures position against the warehouse receipt nor (2) willing to sell their registered metal (warehouse receipts) to a party with a short futures position. Indeed, a substantial portion of those holding registered metal would have acquired the COMEX warehouse receipts by holding long futures positions for delivery. In other words, these registered stocks are held for investment and not for commercial purposes.
In comparison, the eligible category of COMEX warehouse bullion stocks generally refers to bullion held in the warehouses that meets the specifications of an acceptable COMEX bar (proper weight, size, purity and refiner) but does not have a COMEX warehouse receipt issued against it. For example, an investor might purchase several 1,000 oz. bars of silver from a dealer and then deliver the bars for allocated storage at a COMEX warehouse. This is a private arrangement and has nothing to do with the COMEX. Unless these bars are officially registered (the easiest way to do this is through the aforementioned exchange-for-physicals), they will remain in the eligible category until withdrawn from the warehouse by the investor. Thus, the appropriate way to treat eligible COMEX warehouse bullion stocks is that they represent metal that could potentially be registered at some point in the future but cannot presently be used to make delivery under a short futures contract.
Note that Zerohedge says: Eligible silver has NOTHING to do with COMEX!
Subscribe to:
Posts (Atom)
