Spooz, dollars a bore.
Amazon, gold, Priceline will soar.
Parlaying gains more.

Priceline - Daily

Q: Vinnie, if you think the environment is deflationary, why are you so bullish on gold and precious metals?

A: Inflation is inevitable, at some point. For now, prices are deflating. Relative to all the global money printing, there is a massive shortage of gold–which is why gold is so strongly bid here.

Gold is a buy buy buy and we are still deflating. At some point, inflation abounds. Imagine how high it will go when we hit that tipping point.

Like the 70’s, we are right smack in front of a 10x move higher in gold.

And the beat goes on.

I was long gold last year. Recently, I noted the yellow metal in a range. Now, I am a raging bull on gold. The new high in gold is akin to the new high internet stocks–EBAY, YHOO, AMZN, et.al. circa 1997.

In the years to come someone will ask me, “what about 2009-2019, what was the hot market then?”

To which I will reply, “Yes. The decade where all that glittered was gold.”

It was just like the 70’s.

And the beat goes on.

Trader Art - Gold - Oil on canvas surrounded by silver frame

Today’s trading was a flight away from risk–risk off. US equities were weak with the S&P 500 (SPX) off 2.82%, the Dow Jones (INDU) Industrial Average down 2.51% and the tech heavy Nasdaq Composite (COMPQ) down 2.5%. The Volatility Index traded higher by 24% at 30.71. On the Nasdaq, there were 4.2 decliners for every advancer. On the NYSE, 6.5 decliners for every advancer. Volume was heavy all around.

S&P 500 - Daily

Volatility Index (VIX) - Daily

The US Dollar index closed higher by .62% at 76.39, Ten year Treasury futures traded higher by to close at 118 19/32 or up .76%, IEF closed at $91.99.

IEF - iShares 7-10 Year Treasury

Below are a few of the intraday charts.

US Dollar Index - 15 Minute

Crude Oil - 15 Minute

ES S&P Electronic Mini

Citigroup: He Said, She Said

I couldn’t help but reach for puts in Citigroup (C) today. Analyst Mike Mayo was quoted as saying that Citigroup will write down $10 billion of deferred tax assets, representing 10% of Citigroup’s tangible equity. Citigroup quickly responded they had no idea how the analyst was making those calculations. No matter if Citigroup learns how to calculate or not, their common stock is likely heading south of $1 within the next 6 months to year. I am short the big C–the former largest bank in the world.

Citigroup - Daily

The Shimmer of Gold and Silver

Yesterday, I noted that my stance had changed on the precious metals. I am positioned to take advantage of a move higher in gold and silver.

Gold was weak at the equity open this morning, but strengthened throughout the day to close near unchanged. This is evidence of the strength in gold to come. I am long select gold miners and maintain my stop below yesterday’s low. Credit default swaps on Japanese sovereign debt are rising, and the Yen is outperforming against the US Dollar versus other major currencies including the Euro (FXY), the British Pound (FXB) and the Aussie Dollar (AUD).

The charts below show this outperformance graphically. It is my view that this relationship will eventually lead to US Dollar weakness, and therefore strength in gold.

Gold - Daily

FXY - Japanese Yen

FXE - Euro

FXB - British Pound

FXA - Australian Dollar

Next week, same time, same place. And the beat goes on.

I recently noted being on the sidelines in relation to the precious metals: gold and silver. I added exposure to the metals today. I am using a stop below yesterday’s low in the GLD and gold futures.

Gold