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Wednesday, November 5, 2014

OH THE HUMANITY - our favourite chart


GDXJ:


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.


4 comments:

  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%....

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    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.

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

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

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