Wednesday, November 5, 2014

OH THE HUMANITY - our favourite chart


Man, it's down 25% in the past 6 trading days. It never even dropped this bad when gold broke down through $1500.

And thus:

Kip Keen - what Rick Rule got wrong. Quote:

Kip Keen: How has the junior market met your expectations from earlier in the year - quite bullish with you saying it's time to buy - and have you tweaked your vision at all because of the way 2014 has unfolded?

Rick Rule: My experience - depending on how you count them this is my fourth or fifth cycle - is that because we didn't see a capitulation sell-off in conjunction with what I saw as a bottom in July of 2013 I thought we might escape one. And earlier this year I was saying we were going to trade in sort of a saucer shape recovery but channel with higher highs and lower lows, lots of volatility.

It looks to me now there's a 50% chance of a capitulation sell-off, this year, starting very soon. My experience has been in three prior markets that the capitulation sell-off triggers the recovery.

Nobody sees the recovery coming because they're reeling so bad from the sell-off. But the truth is markets move up because the market exceeds expectation and a capitulation sell-off obliterates expectation which means the market can't help but exceed it.

Well I guess now you're getting your capitulation sell-off alright, good and hard!

You know, by the way, that it really is a capitulation selloff, because gold actually hasn't dropped except in US dollar terms, as I said earlier today.

Let's just hope Russia doesn't dump those 1000 tons of gold into the market next April after their currency reserves have collapsed.


  1. To say that the probability that something might, or might not happen, is 50% is somewhat a cop out. Like, if you already know you don't know, and the only two possibilities is that it may happen, or it may not, well yea (from such a perspective) its 50%....

    1. Day Van hits on one of my (many many) pet peeves. The market soothsayers who confidently predict there being a 70% chance of X happening, or a 80% of Y happening.

    2. Yeah, I figured that there was a 60% chance it would rub you the wrong way.

    3. Anyway if we don't feed your pet peeves they'll starve.